Mandatory show cause notice required before central excise duty recovery; direct demand notice without it is void.

A central excise demand notice issued directly, without first serving a show cause notice, was held invalid because both Rule 10 and Rule 10A require notice and an opportunity to respond before recovery of duty. The demand could not be justified by relying on an incorrect or alternative rule, since the mandatory pre-recovery procedure was not followed. The notice was therefore treated as illegal and void for non-compliance with the prescribed process.

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Issues: Whether a demand notice for central excise duty issued without a prior show cause notice under Rule 10 or Rule 10A was valid and enforceable.

Analysis: The demand was issued straightway as a notice of demand and did not call upon the petitioners to show cause. The Court held that both Rule 10 and Rule 10A contemplate issue of a show cause notice before recovery of duty. The attempt to sustain the demand without such notice was therefore inconsistent with the mandatory procedure, and the demand could not be supported merely by referring to the wrong or alternative rule.

Conclusion: The demand notice was illegal and void for want of a prior show cause notice, and the challenge succeeded.

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