1990 (8) TMI 157 - HC - Central Excise

Court dismisses writ petition challenging show cause notice validity and procedural issues under Sections 11A and 35A.

TRIVENI SHEET GLASS WORKS LTD. Versus COLLECTOR OF C. EX. & CUS.

The court dismissed the writ petition, ruling that the show cause notice was not time-barred and that proceedings under Section 11A and Section 35A were ... Demand - Limitation - Review Show Cause Notice Issues Involved:1. Validity of the show cause notice dated 22-5-1982.2. Allegation of the notice being barred by time.3. Validity of the initial notice under Section 11A.4. Requirement of modifying the approved price list before raising additional duty.5. Allegation of legal mala fides.6. Adequacy of the show cause notices in specifying the wholesale cash price.7. Relevance of the grounds mentioned in the show cause notices.Detailed Analysis:1. Validity of the Show Cause Notice Dated 22-5-1982:The petitioner challenged the show cause notice issued by the Collector, Central Excise, under Section 35A of the Central Excise Act. The notice proposed to revise and set aside the Assistant Collector's order dated 17-6-1981 and confirm the demand of duty allegedly evaded by the petitioner. The petitioner did not submit an explanation to the notice but approached the court for relief.2. Allegation of the Notice Being Barred by Time:The petitioner argued that the impugned notice was barred by time, having been issued beyond six months of the order of the Assistant Collector proposed to be revised. The court, however, interpreted Section 35A and Section 11A and concluded that the limitation period applicable under Section 11A (both the main limb and the proviso) should be read into Section 35A(3)(b). The court held that the impugned notice was issued within one year of the order of the Assistant Collector, thus not barred by time.3. Validity of the Initial Notice under Section 11A:The petitioner contended that the initial notice under Section 11A was bad in law due to the absence of an allegation of suppression of facts. The court noted that the show cause notice under Section 11A clearly alleged suppression of relevant facts and misrepresentation. The court found no merit in the argument that the initial notice was invalid.4. Requirement of Modifying the Approved Price List Before Raising Additional Duty:The petitioner argued that no demand for additional duty could be raised until the approved price list was modified. The court disagreed, stating that the notice under Section 11A alleged that the approval of the price list was vitiated for several reasons. Therefore, the proceedings under Section 11A were maintainable without prior modification of the price list.5. Allegation of Legal Mala Fides:The petitioner alleged legal mala fides, arguing that no proceedings under Section 11A were taken for periods before 1-6-1977 or after 30-6-1981. The court found this argument unconvincing and held that the absence of proceedings for other periods did not constitute legal mala fides.6. Adequacy of the Show Cause Notices in Specifying the Wholesale Cash Price:The petitioner claimed that neither the initial notice under Section 11A nor the impugned notice under Section 35A specified the wholesale cash price. The court found this argument untenable, noting that the show cause notice specifically worked out the amount of duty short-paid, indicating that the Department had determined the correct duty.7. Relevance of the Grounds Mentioned in the Show Cause Notices:The petitioner argued that the grounds mentioned in the show cause notices were irrelevant. The court held that the allegations of misrepresentation and suppression of facts required investigation into facts, which was not within the court's purview at this stage. The court also noted that the relevance and value of the statements and facts referred to in the notices were matters for the authority to consider.Conclusion:The court dismissed the writ petition, holding that the impugned show cause notice was not barred by limitation and that the proceedings under Section 11A and Section 35A were maintainable. The court found no merit in the petitioner's arguments regarding legal mala fides, the necessity of modifying the approved price list, and the adequacy of the show cause notices. The court emphasized that disputed questions of fact should be investigated by the appropriate authority, not in a writ petition.