Limitation for show cause notice under Central Excise law depends on a court stay of notice issuance or service, not merely levy stay.

The limitation issue turned on the Explanation to Section 11A of the Central Excise Act, 1944, which excludes time only when service or issuance of the show cause notice is stayed by a court order. A stay of the levy's operation was not enough, because no order restrained issue or service of the notice. As the notice was otherwise issued beyond the normal six-month period, the statutory exclusion did not apply and the notice was time-barred.

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Issues: Whether the show cause notice issued for recovery of cess was barred by limitation and whether the period during which the High Court stayed the operation of the levy could be excluded under the Explanation to Section 11A of the Central Excise Act, 1944.

Analysis: The limitation objection turned on the scope of the Explanation to Section 11A of the Central Excise Act, 1944, which excludes only the period during which service or issue of the notice is stayed by an order of court. The High Court had stayed the operation of the levy under the impugned enactment, but there was no order staying the issuance or service of the show cause notice. Since the notice was otherwise beyond the normal period of six months, the statutory exclusion was not attracted.

Conclusion: The show cause notice remained time-barred, and the limitation defence succeeded in favour of the assessee.

Ratio Decidendi: Only a judicial stay of the issuance or service of the show cause notice, and not merely a stay of the operation of the levy, attracts the exclusion of time under the Explanation to Section 11A of the Central Excise Act, 1944.

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