Statutory show-cause procedure and fair hearing requirements governed excise demand survival and fresh adjudication.

An initial quantified excise duty demand issued without a valid statutory show-cause notice ceased to survive once the department itself later invoked the mandatory Section 11A procedure and treated the later notice as a continuation of the earlier demand. The court also held that a confirmation order passed without a substantive reply and without a fair opportunity of defence could not stand, particularly where the assessee had sought deferment pending appeal. The impugned confirmation was quashed, and the matter was remitted for fresh adjudication after a proper reply and personal hearing.

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Issues: (i) Whether the initial demand notice for differential excise duty, issued without a valid show-cause notice under Section 11A, survived in law after the department subsequently invoked Section 11A; and (ii) whether the later adjudication order confirming the demand could be sustained when the assessee had not filed a substantive reply and had sought deferment of hearing.

Issue (i): Whether the initial demand notice for differential excise duty, issued without a valid show-cause notice under Section 11A, survived in law after the department subsequently invoked Section 11A.

Analysis: The demand notice was for a quantified differential duty, but the department later issued a show-cause notice expressly stating that it was in continuation of the earlier demand and requiring recourse to Section 11A. Once the department itself adopted the statutory show-cause procedure, the earlier demand lost its independent efficacy. The appellate challenge to the original demand was therefore no longer meaningful, and the proper course was to treat that demand as not surviving.

Conclusion: The initial demand notice did not subsist in law.

Issue (ii): Whether the later adjudication order confirming the demand could be sustained when the assessee had not filed a substantive reply and had sought deferment of hearing.

Analysis: The later order was passed in circumstances showing that the assessee had not put forward a real adjudicatory defence and had sought time because the matter was already pending in appeal. The confirmation was treated as an ex parte determination, and the Court declined to relegate the assessee to the appellate forum. To secure a fair opportunity, the impugned confirmation was quashed and liberty was granted to file a proper show-cause response within the time fixed by the Court, followed by fresh adjudication after personal hearing.

Conclusion: The later confirmation order was set aside and fresh adjudication was directed after a proper reply and hearing.

Final Conclusion: The writ petition succeeded to the extent of quashing the later demand confirmation and restoring the matter for fresh adjudication on a proper show-cause response, while the earlier demand was held not to continue in law.

Ratio Decidendi: When the department itself invokes the mandatory statutory show-cause procedure after issuing an initial demand, the earlier demand ceases to survive, and a confirmation passed without a fair and effective opportunity of defence cannot stand.

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