Show cause notice scrutiny under excise law cannot be stopped at writ stage where lease genuineness and duty liability remain factual issues.

Interference with a Central Excise show cause notice under Article 226 is exceptional and is not justified merely because the notice is disputed. An earlier writ order concerning the lessee's registration and notification benefit did not decide the genuineness of the lease transaction or the present petitioner's excise liability, so it did not bar the Revenue from examining those issues. Proceedings under Section 11A of the Central Excise Act remain competent where non-levy or short levy is alleged on grounds including suppression, misstatement, fraud, or a colourable transaction. Whether the lease was genuine or a device to evade duty required factual determination by the departmental authority, not writ adjudication at the notice stage.

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Issues: Whether the High Court should interfere under Article 226 with show cause notices issued under the Central Excise Act on the ground that an earlier writ order concerning the lessee's registration and notification benefit barred the Revenue from enquiring into the genuineness of the lease transaction and the petitioner's liability to excise duty.

Analysis: Interference with a show cause notice is exceptional and is not warranted merely because the notice is disputed. The earlier writ order dealt only with the lessee's entitlement to proceed as an independent processor on the basis of its subsisting registration and the then-existing notification claim; it did not adjudicate the genuineness of the lease arrangement or the liability of the present petitioner under the impugned notices. A proceeding under Section 11A of the Central Excise Act, 1944 is competent where non-levy or short levy is alleged on account of suppression, misstatement, fraud, or a colourable transaction. The question whether the lease was genuine or merely a device to evade duty required factual adjudication by the departmental authority and could not be finally decided in writ proceedings at the notice stage.

Conclusion: The challenge to the show cause notices was not maintainable at this stage, and no ground was made out to quash or restrain the departmental enquiry.

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