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of <h1>Show cause notice on excise duty quashed for violating testing procedures, petitioners succeed</h1> <h3>Satyam Enterprises thr. Pro. Shyamla Sahu, Sahu Traders thr. Pro. Pankaj Sahu Versus Union of India Thr. Secretary Ministry of Finance Department of Revenue New Delhi, Commissioner Customs And Central Excise, Assistant Commissioner Customs and Central Excise (Division II) Sagar, Assistant Commissioner Customs and Central Excise and Service Tax, Madhya Pradesh</h3> Satyam Enterprises thr. Pro. Shyamla Sahu, Sahu Traders thr. Pro. Pankaj Sahu Versus Union of India Thr. Secretary Ministry of Finance Department of ... Issues:Challenge to show cause notice for excise duty on a product named 'Pan Samagrai' under specific tariff entry. Violation of statutory requirement in testing procedure and issuance of show cause notice.Analysis:The petitioners in this case sought the quashment of a show cause notice dated 10.2.2015 issued by the Commissioner Custom Central Excise, Bhopal regarding the imposition of excise duty on their product named 'Pan Samagrai'. The product fell under tariff entry 24039920. The petitioners contended that as the product was not manufactured using tobacco, the duty entry under 24011090 would not apply to them. They raised objections and challenged the show cause notice issued on 13.1.2012. The petitioners argued that Rule 56 of the Central Excise Rules mandated testing of goods and classification as per rules. The earlier writ petition was allowed due to the failure to provide the test report to the petitioners, leading to the quashing of the show cause notice.In the subsequent show cause notice, it was highlighted that Clause 8 of Chapter 11 of the statutory manual had been violated. This clause outlined the procedure for re-testing if the assessee was dissatisfied with the initial test results. The petitioners' counsel emphasized that the sample taken during inspection should be divided into sealed packets, with one copy provided to the petitioners for retesting. The failure to comply with Clause 8.8, which required providing the sample to the petitioners, was argued as a violation of statutory rules, warranting the quashing of the show cause notice.Although the respondents claimed to have supplied the test report post the earlier writ petition, the petitioners denied receiving it. The court noted the silence in the respondent's reply regarding the provision of the sample for retesting as per Clause 8. The court emphasized that any action taken in violation of statutory rules could not be upheld. Given the previous quashing of a notice on similar grounds, the court concluded that the show cause notice in question was issued in violation of statutory provisions, thereby allowing the petitions, quashing the notice, and granting liberty to proceed in accordance with the law.In conclusion, the court allowed both petitions, quashed the show cause notice dated 10.2.2015, and provided the respondents with the opportunity to proceed as per statutory requirements.
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