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of <h1>Tribunal Overturns Decision Due to Inadequate Show Cause Notice</h1> The tribunal allowed the appeal, finding that the show cause notice lacked essential facts for proper defense and that the adjudicating authority exceeded ... Penalty u/s 11AC - Scope of Show cause notice - Held that:- If a show cause notice does not bring out the charges against the appellant clearly by giving all the relevant facts, the same has been held to be inappropriate proceedings and appeals have been allowed. In the present case also detailed factual matrix of clearances of both units and why duty liability is attracted has not been provided in the show cause notice. No show cause notice has been issued to the other unit of the Company. No proper justification has been given in the show cause notice, giving specific evidences and reasons to suggest that there is wilful misstatement or suppression on the part of the appellant with intention to evade payment of duty. In the absence of essential factual details, it has to be held, in view of the case laws relied upon by the appellant and discussed above, that show cause notice is the foundation of adjudication proceedings and if the charges are not brought out properly to the knowledge of assessee, then he should not face charges by any order passed beyond the facts contained in the show cause notice. Appellant has, therefore, rightly taken a stand that proceedings were taken on the facts not stated in the show cause notice, dated 27-3-2006 and when this was brought to the notice of the lower authorities then either the issue was not framed or the same was brushed aside holding that the issue is not relevant. Any infirmity in the show cause notice cannot be bridged by the adjudication proceedings and the order passed by the adjudicating authority and the first appellate authority. - show cause notice dated 27-3-2006 issued to the appellant did not disclose all the essential facts in the body of the show cause notice in order to defend properly and adjudicating authority has gone beyond the scope of facts narrated in the show cause notice. - Decided in favour of assessee. Issues Involved:1. Whether the orders passed by the lower authorities were beyond the scope of the show cause notice.2. Whether the demand is time-barred due to lack of specific grounds of suppression/misstatement with the intention to evade duty.Issue-wise Detailed Analysis:1. Scope of Show Cause Notice:The appellant argued that the orders passed by the lower authorities were beyond the scope of the show cause notice dated 27-3-2006, as there was no allegation or proposal for clubbing the clearances of Unit I and Unit II. The show cause notice only addressed Unit II and did not mention any clubbing of clearances with Unit I. The appellant relied on several case laws to support their argument that the show cause notice must clearly state all relevant facts and charges to allow proper defense. The tribunal observed that the show cause notice did not clearly bring out the charges against the appellant, particularly regarding the clubbing of clearances of both units. The tribunal cited multiple precedents, including the Supreme Court's decision in Brindavan Beverages (P) Limited, which emphasized that a show cause notice must be specific and detailed to provide the noticee a fair opportunity to defend. The tribunal concluded that the show cause notice failed to disclose all essential facts, making the proceedings inappropriate.2. Time-barred Demand:The appellant contended that the demand was time-barred as the show cause notice did not explain specific grounds of suppression or misstatement with the intention to evade duty. The appellant referred to various case laws asserting that improper issuance of a show cause notice and lack of specific allegations render the demand invalid. The tribunal noted that the show cause notice did not provide proper justification or specific evidence of willful misstatement or suppression by the appellant. The tribunal held that the absence of essential factual details in the show cause notice invalidated the proceedings, aligning with the case laws cited by the appellant.Conclusion:The tribunal allowed the appeal, concluding that the show cause notice did not disclose all essential facts necessary for the appellant to defend properly and that the adjudicating authority had gone beyond the scope of the show cause notice. The tribunal emphasized that any infirmity in the show cause notice could not be rectified by the adjudication proceedings. Consequently, the tribunal set aside the orders passed by the lower authorities and allowed the appeal with consequential relief, if any.Pronouncement:The judgment was pronounced in the Court on 27-9-2013.
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