Binding reply-period instructions vitiate Central Excise show cause notice and consequential withdrawal order

Binding departmental instructions requiring one month to reply to a Central Excise show cause notice must be followed, and a notice granting only ten days is procedurally defective. Where the assessee is denied the prescribed opportunity to respond, the defect goes to the validity of the notice and also taints any consequential order passed on it, including withdrawal of exemption from filing price lists. The text states that the instructions were treated as binding on the Collector, and non-compliance rendered both the notice and the resulting order liable to be quashed.

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Issues: Whether a show cause notice granting only ten days to reply, in the face of binding departmental instructions allowing one month for reply in Central Excise cases, vitiated the consequent order withdrawing exemption from filing price lists.

Analysis: The petitioner was required to respond to the notice within ten days, although the Central Board of Excise and Customs had instructed that parties should be allowed one month for replying to show cause notices in Central Excise matters. The respondents conceded that these instructions were binding on the Collector. The request for additional time was not accepted, and the impugned withdrawal order was passed without affording the period contemplated by the binding instructions. The procedural defect went to the validity of the notice and the consequential order.

Conclusion: The notice and the order were vitiated and liable to be quashed, in favour of the assessee.

Ratio Decidendi: Binding departmental instructions governing the time for reply to a show cause notice must be followed, and failure to grant the prescribed opportunity vitiates the notice and any consequential order passed thereon.

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