Strict compliance with concessionary excise notifications upheld, with show cause notice on understated retail price treated as sustainable.

A concessionary excise exemption notification was construed as requiring strict compliance with the declared maximum retail sale price on cigarette packages, and a show cause notice based on an allegedly understated printed price was treated as legally sustainable for adjudication. The doctrine of contemporanea expositio was found inapplicable because there was no settled contemporaneous interpretation supporting the manufacturer's reading. Section 11A of the Central Excises and Salt Act, 1944 was treated as an independent recovery provision, not confined to appellate or revisional matters. Notification No. 215/86 delegating Collector-like powers to the Director of Anti Evasion was upheld as valid, and the bias objection was rejected for lack of material showing personal interest or real likelihood of bias.

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Issues: (i) Whether the impugned exemption notification required the manufacturer to declare the maximum retail sale price on cigarette packages and whether the show cause notice alleging short payment on the basis of a lower printed price was without authority of law; (ii) whether the doctrine of contemporanea expositio could be invoked to support the petitioner's construction of the notification; (iii) whether Section 11A of the Central Excises and Salt Act, 1944 was confined to matters linked with appellate or revisional proceedings; (iv) whether Notification No. 215/86 empowering the Director of Anti Evasion to exercise Collector's powers throughout India was ultra vires; and (v) whether the issuing authority was disqualified by bias or personal interest.

Issue (i): Whether the impugned exemption notification required the manufacturer to declare the maximum retail sale price on cigarette packages and whether the show cause notice alleging short payment on the basis of a lower printed price was without authority of law.

Analysis: The notification was construed as a concessionary measure and, therefore, had to be strictly complied with. Reading the definitions of "cigarettes packed in packages" and "sale price" together, the declared price was held to mean the maximum retail price at which the goods could bona fide be sold through the retail chain. On the materials disclosed, the notice alleging that the petitioner had printed a lower price while circulating a separate "effective price" and thereby paid duty at a lower slab required adjudication. The Court declined final determination at the show cause stage but held that the notice disclosed a legally sustainable basis for proceeding.

Conclusion: The notification required declaration of the maximum retail sale price, and the show cause notice was not authority of law.

Issue (ii): Whether the doctrine of contemporanea expositio could be invoked to support the petitioner's construction of the notification.

Analysis: The Court held that contemporaneous exposition had no application on the facts. There was no relevant judicial or authoritative contemporaneous interpretation of the notification that uniformly supported the petitioner's reading, and the materials indicated that the petitioner's conduct was not consistent with a settled administrative understanding immune from challenge. The doctrine could not be used to defeat a concession notification where serious allegations of evasion were made on the basis of seized documents.

Conclusion: The doctrine of contemporanea expositio did not assist the petitioner.

Issue (iii): Whether Section 11A of the Central Excises and Salt Act, 1944 was confined to matters linked with appellate or revisional proceedings.

Analysis: Section 11A was held to be an independent substantive provision for recovery of duty not levied, short levied, not paid, short paid, or erroneously refunded. Sections 35A and 35EE were treated as separate appellate and revisional provisions that borrowed the limitation period from Section 11A, but did not control its operation. The Court rejected the contention that Section 11A was merely a machinery provision dependent on appeal or revision.

Conclusion: Section 11A was an independent recovery provision and the impugned notice could be issued under it.

Issue (iv): Whether Notification No. 215/86 empowering the Director of Anti Evasion to exercise Collector's powers throughout India was ultra vires.

Analysis: The Court upheld the notification as a valid exercise of delegated power under Section 2(b) of the Act read with Rule 4 of the Central Excise Rules, 1944. The conferral of powers was treated as incidental to the statutory scheme, and the absence of an express prohibition against such delegation or concurrent exercise of authority was regarded as decisive. The validity of the notification had also been affirmed by the Madras High Court, and the Court found no legal infirmity warranting interference.

Conclusion: Notification No. 215/86 was valid and the issuing authority had jurisdiction.

Issue (v): Whether the issuing authority was disqualified by bias or personal interest.

Analysis: The allegations of bias were found unsupported by material particulars. The reward scheme did not establish a personal interest, the alleged press statements were not shown in context to demonstrate predisposition, and the mere fact that the authority had initiated the proceedings or had earlier dealings with the petitioner did not establish a real likelihood of bias. The Court held that an objective adjudicating process at the show cause stage did not, on these facts, offend natural justice.

Conclusion: No disqualification on the ground of bias was established.

Final Conclusion: The Court found no jurisdictional or legal infirmity in the show cause notice, upheld the interpretation adopted by the Revenue on the notification and the statutory recovery provision, sustained the validity of the delegated authority, and rejected the bias challenge.

Ratio Decidendi: A concessionary excise notification must be strictly complied with according to its plain terms, and where the declared price is shown prima facie to be a deliberately understated retail price used to obtain a lower duty slab, a show cause notice under Section 11A is maintainable; delegated jurisdiction is valid where incidental to the statutory scheme and not expressly prohibited.

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