2004 (1) TMI 422 - AT - Central Excise

Tribunal clarifies demand notice issuance in excise cases, refers matter to Larger Bench

GODREJ SOAPS LTD. Versus COMMISSIONER OF CENTRAL EXCISE, MUMBAI

The Tribunal addressed the jurisdictional issue of demand notice issuance by the Assistant Collector in cases of clandestine manufacture and removal of ... Show cause notice - Clandestine manufacture and removal - Demand - Clandestine manufacture and removal Issues:1. Jurisdiction of demand notice issuance by Assistant Collector2. Validity of common Show Cause Notice for demand, confiscation, and penaltyJurisdiction of demand notice issuance by Assistant Collector:The main issue in this judgment revolves around the jurisdiction of the demand notice issued by the Assistant Collector in cases involving clandestine manufacture and removal of excisable goods without registration and duty payment. The appellants contended that the Show Cause Notice issued by the Assistant Collector lacked jurisdiction as demand notices in such cases should be issued by the Collector under Section 11A(1) of the Central Excise Act, 1944. The Tribunal referred to the decision in C.C.E., Indore v. Oil & Natural Gas Commission, emphasizing that demand notices in cases of fraud or suppression must be issued by the Collector. The issue was whether the notice for demand of duty, confiscation, and penalty was valid when issued by the Assistant Collector.Validity of common Show Cause Notice for demand, confiscation, and penalty:The second issue focused on the validity of a common Show Cause Notice covering demand, confiscation, and penalty. The Tribunal analyzed different views expressed by its Members in the case of Alcobex Metals. Some Members opined that the notice was valid for confiscation and penalty even if the demand notice was invalid, while others believed the entire proceedings would lack jurisdiction. The Tribunal highlighted the absence of a legal requirement for the Collector to issue notices for confiscation and penalty, unlike the demand notice under Section 11A. It emphasized the applicability of Section 124 of the Customs Act, 1962, in excise cases for confiscation and penalty proceedings. The Tribunal concluded that the matter required reference to a Larger Bench to resolve the issue comprehensively before proceeding with the appeals on merit.This judgment extensively examined the jurisdictional aspects of demand notice issuance by the Assistant Collector and the validity of a common Show Cause Notice for demand, confiscation, and penalty in excise cases involving clandestine activities. The Tribunal emphasized the legal provisions under the Central Excise Act, 1944, and the Customs Act, 1962, to determine the validity of the notices issued and the jurisdiction of the authorities involved. The decision highlighted the need for a detailed analysis and reference to a Larger Bench to clarify the legal position on these critical issues before proceeding with the adjudication on the merits of the case.