Court dismisses petitioners' claims, grants show-cause filing opportunity. No costs awarded.

The court rejected all contentions raised by the petitioners, dismissing the writ application. However, the court allowed the petitioners to file a show-cause within four weeks, with the adjudicating authority to proceed accordingly. No costs were awarded in the matter.

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Issues Involved:
1. Bias and harassment by the issuing authority.
2. Notice barred by limitation under Section 11A of the Act.
3. Jurisdiction of the Assistant Collector to direct a show cause to the Collector.
4. Discrimination and violation of Articles 14, 19(1)(g), and 265 of the Constitution.

Issue-wise Detailed Analysis:

1. Bias and Harassment by the Issuing Authority:
The petitioners argued that the notice issued under Annexure-1 was the outcome of bias and intended to harass them. They cited various proceedings initiated by the excise authorities, which were either interfered with by higher forums or still pending. The court, however, found no connection between these earlier proceedings and the impugned show-cause notice. The court stated, "An allegation of bias must be established through positive materials," and concluded that the petitioners failed to provide sufficient evidence to prove bias. Thus, the court rejected this contention.

2. Notice Barred by Limitation under Section 11A of the Act:
The petitioners contended that the notice was barred by limitation as it was not served within six months from the date specified in Section 11A. They relied on a prior decision where a similar notice under Section 28 of the Customs Act was found to be barred by limitation. However, the court distinguished the present case, noting that the Union Government argued that the proviso to Section 11A, which extends the limitation period to five years, applied. The court stated, "On a bare perusal of the notice, it is difficult for us at this stage to hold that the extended period of limitation provided in the proviso to Section 11A is not attracted." Therefore, the court did not quash the notice on the ground of limitation but allowed the petitioners to raise this issue before the adjudicating authority.

3. Jurisdiction of the Assistant Collector to Direct a Show Cause to the Collector:
During the hearing, the petitioners did not press this ground due to the amended provisions of Section 11A(1) & (2) of the Act. Consequently, no arguments were advanced on this issue, and it was not considered by the court.

4. Discrimination and Violation of Articles 14, 19(1)(g), and 265 of the Constitution:
The petitioners did not advance any arguments on how the notice was discriminatory and violated Articles 14, 19(1)(g), and 265 of the Constitution. Therefore, this ground was not pressed, and the court did not address it.

Additional Contention: Conditions Precedent for Exercise of Power under Section 11A:
The petitioners argued that the conditions precedent for the exercise of power under Section 11A were not satisfied, rendering the notice without jurisdiction. They cited a decision interpreting "reason to believe" under the Income-tax Act, arguing that similar reasoning should apply. However, the court found no such expression in Section 11A of the Central Excises & Salt Act. The court stated, "On reading the impugned notice, we are unable to come to the conclusion that the notice prima facie does not contain materials for invoking jurisdiction under Section 11A of the Act." Thus, the court rejected this contention as well.

Conclusion:
All contentions raised by the petitioners were rejected. The writ application was dismissed, but the court permitted the petitioners to file a show-cause within four weeks, after which the adjudicating authority would dispose of the proceedings in accordance with law. The court concluded, "With these observations, the writ application is dismissed, but without any order as to costs."

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