Composite show cause notice validity: confiscation and penalty may survive even if the duty demand portion lacks jurisdiction.

A composite show cause notice covering duty demand, confiscation and penalty was analysed on the footing that the duty component depended on issuance by the Collector under Section 11A of the Central Excise Act, 1944 as applicable at the material time. Confiscation and penalty were treated as resting on a separate statutory basis under Section 124 of the Customs Act, 1962 read with Section 12 of the Central Excise Act, 1944, so their validity did not necessarily depend on the duty demand portion. Earlier Tribunal views were found to be conflicting on whether defect in the duty demand invalidates the entire notice, and the issue was referred to a Larger Bench for authoritative resolution.

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Issues: Whether a common show cause notice, issued for demand of duty as well as confiscation and penalty, is wholly invalid when the demand portion is said to be without jurisdiction, and whether the question should be referred to a Larger Bench.

Analysis: The demand for duty in cases involving fraud, suppression, or contravention was held to require issuance by the Collector under Section 11A of the Central Excise Act, 1944 as applicable at the material time. At the same time, confiscation and penalty were treated as proceedings governed by a different legal footing, namely Section 124 of the Customs Act, 1962 read with Section 12 of the Central Excise Act, 1944, and the statutory scheme did not require the Collector alone to issue the notice for those purposes. The order noted conflicting views in earlier Tribunal decisions on whether the invalidity of the duty demand portion necessarily vitiates the rest of the composite notice.

Conclusion: The notice for confiscation and penalty was treated as capable of surviving independently, but the matter was held to require reference to a Larger Bench for authoritative resolution.

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