Show cause notice authority and denial of double MODVAT credit under Central Excise law

A Superintendent may validly issue a show cause notice under Central Excise law where no statutory bar exists, and an internal administrative circular cannot curtail that power or invalidate the notice. The Tribunal also held that deemed MODVAT credit was unavailable because the appellant had already taken actual credit on the grey fabrics under Rule 57A, and paragraph 4 of Notification No. 29/96-CE (N.T.) did not permit a second credit benefit. The challenge to the demand therefore failed, and the appeal was rejected.

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Issues: Whether the show cause notice issued by the Superintendent was without authority of law and whether the appellant was entitled to deemed MODVAT credit despite having availed actual credit on the grey fabrics.

Analysis: The appellant had already taken actual credit under Rule 57A and, in view of paragraph 4 of Notification No. 29/96-CE (N.T.), was not entitled to avail deemed credit again. That conclusion was not disputed on merits. The only surviving contention was that the notice was invalid because, according to Circular No. 66/88 dated 20.12.1988, such notices should be issued by higher adjudicating officers. The Tribunal held that the Superintendent, being a Central Excise officer, was empowered to issue the notice under the Act and no statutory provision barred him from doing so. The circular was treated as an internal administrative instruction and not as a source of legal restriction.

Conclusion: The show cause notice was valid and the challenge to the demand failed; the appellant was not entitled to the deemed credit and the appeal was rejected.

Ratio Decidendi: In the absence of any statutory bar, a Superintendent competent under the Central Excise law may issue a show cause notice, and an internal administrative circular cannot curtail that power or invalidate the notice.

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