Show-cause notices for excise duty can survive writ challenge where fraud or suppression allegations require factual adjudication.

Show-cause notices under Section 11A of the Central Excises and Salt Act, read with Rule 233-A, were held not to be ex facie without jurisdiction where they alleged fraud, suppression, wilful misstatement, collusion, undervaluation, or contravention with intent to evade duty. The Court treated the existence of those statutory ingredients as a factual matter for adjudication, and held that prior approval of price lists or classifications did not create an absolute bar to reopening. Allegations of clandestine additional consideration likewise required examination in the assessment process, not rejection at the writ stage.

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Issues: Whether show-cause notices issued under Section 11A of the Central Excises and Salt Act, 1944 read with Rule 233-A of the Central Excise Rules, 1944 were without jurisdiction and liable to be quashed on the ground that the approved price lists and classifications could not be reopened, and whether the allegations of fraud, collusion, wilful misstatement, suppression of facts, and undervaluation required factual adjudication.

Analysis: Section 11A authorises recovery of duty not levied, short-levied, short-paid, or erroneously refunded, and its proviso permits invocation of the extended period where the non-levy or short-levy is alleged to have occurred by reason of fraud, collusion, wilful misstatement, suppression of facts, or contravention of statutory provisions with intent to evade duty. The Court held that whether such ingredients exist is a question of fact requiring investigation, and the materials in the notices prima facie disclosed grounds for invoking that provision. Approved price lists and prior classification did not create an absolute bar against reopening where the department alleges statutory grounds for reassessment. The Court further held that valuation under Section 4(1)(a) cannot preclude action where the notices allege under-valuation and clandestine recovery of additional consideration, because such issues must be examined in adjudication rather than at the threshold in writ jurisdiction.

Conclusion: The notices were not shown to be ex facie without jurisdiction, and the challenge to them could not succeed at the writ stage.

Final Conclusion: The appeals succeeded, the quashing of the notices was set aside, and the writ petitions stood dismissed, leaving the revenue free to proceed in accordance with law.

Ratio Decidendi: A show-cause notice under Section 11A invoking fraud, suppression, or similar statutory grounds cannot be quashed in writ jurisdiction merely because price lists or classifications were earlier approved, if the notice on its face discloses a factual basis requiring adjudication.

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