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of <h1>Court rules demand notice for excise/customs duties void; must issue show cause notice first.</h1> <h3>M/s. Aurobindo Pharma Limited Versus The Assistant Commissioner, Customs, Central Excise & Service Tax</h3> The court ruled in favor of the petitioner, finding that the demand notice for central excise and customs duties issued without a prior show cause notice ... Confirmation of demand without issuance of Show Cause Notice - demand in terms bond executed by them - principles of natural justice - demand under Section 28AB of the Customs Act, 1962 and Section 11AB of the Central Excise Act, 1944 - Held that:- If we accept the argument of the learned counsel for the respondent / revenue that in a case of this nature issuance of show cause notice is not required, meaning thereby, no hearing is to be given when a post decisional hearing was given, we are inclined to think that no post decisional hearing is required as there is no provision under law. Accordingly, we reject the said argument - this entire adjudication and consequent demand notice are absurd and in breech of principles of natural justice. - More so, they are noncompliant with the mandatory provision of the aforesaid Section. Matter remanded back to the adjudicating authority to decide the issue with an independent mind - Decided in favor of assessee. Issues:Challenge to demand notice for central excise and customs duties under Customs Act and Central Excise Act. Violation of principles of natural justice due to lack of show cause notice before quantifying the amount. Interpretation of Section 28 of the Customs Act regarding mandatory issuance of show cause notice.Analysis:The writ petition challenges a demand notice for payment of central excise and customs duties along with interest, issued without a prior show cause notice, violating principles of natural justice. The petitioner argued that post decisional hearing does not fulfill the requirement of Section 28 of the Customs Act, which mandates issuance of a show cause notice before adjudication. The respondent contended that show cause notice was not necessary in this case, citing a Supreme Court decision. The court examined whether show cause notice is mandatory in such cases.The court analyzed Section 28(1)(a) of the Customs Act, which requires a show cause notice for duties not levied or short-levied. It concluded that the duty would be payable without the exemption, making show cause notice essential before quantifying the duty. The court emphasized the mandatory nature of Clause (a) of sub-section (1) of Section 28 and the strict construction of fiscal law requirements. Referring to a Supreme Court case, the court highlighted the necessity of a specific format for show cause notices, rejecting the argument that post decisional hearing suffices.The court distinguished the respondent's cited judgment, emphasizing the importance of a show cause notice before making a demand. It reasoned that post decisional hearing does not serve the purpose of allowing the assessee to object to the demand. The court held that the adjudication and demand notice were against natural justice principles and the mandatory provisions of Section 28. It set aside the demand and directed a fresh adjudication with an independent mind, requiring the issuance of a proper show cause notice within a specific timeframe. The writ petition was allowed, and any pending petitions were closed without costs.
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