Show-cause notice requirement for recovery of short-levied excise duty was mandatory before revisional enhancement of duty.

A revisional order under Section 35A could not validly direct recovery of short-levied excise duty unless the affected assessee was first given a proper show-cause notice specifically proposing such recovery within the statutory time limit under Section 11A. Because the order did not notify the assessee that recovery of differential duty was proposed, the statutory procedural safeguard was not met and the direction for payment of short-levied duty was invalid. The Supreme Court set aside the recovery order in favour of the assessee.

---

---

Issues: Whether an order under Section 35A of the Central Excises and Salt Act could validly direct recovery of short-levied duty without a prior notice calling upon the assessee to show cause against such recovery within the time limit prescribed by Section 11A.

Analysis: Section 35A empowered the Collector to revise an order of a subordinate excise officer, but clause (b) of sub-section (3) specifically required notice to the affected person where the proposed order would levy or enhance duty found to have escaped assessment or been short-levied. The notice had to ask the person to show cause against the proposed recovery and had to be issued within the statutory time limit. The order in question did not give the appellants notice that recovery of any short-levied duty was proposed, and the subsequent direction to pay differential duty therefore lacked the procedural safeguard mandated by the statute.

Conclusion: The direction requiring payment of short-levied duty was invalid and was set aside in favour of the assessee.

Ratio Decidendi: A revisional order enhancing or recovering excise duty cannot be sustained unless the affected assessee is given a proper show-cause notice specifically proposing such recovery within the statutory limitation period.

---