2000 (6) TMI 62 - AT - Central Excise

Tribunal upholds Central Excise duty demand without notice, citing valid waiver; penalty reduced.

The Tribunal upheld the Department's demand of Central Excise duty without a show-cause notice, citing the appellants' waiver of the notice as a valid ... Demand - Show cause notice Issues:1. Whether the demand of duty without issuing a show-cause notice is legal.2. Validity of waiver of show-cause notice by the assessee.3. Interpretation of Rule 233A regarding the issuance of a show-cause notice.4. Applicability of the Supreme Court decision in a Customs matter to the present case.5. Appropriateness of the penalty imposed for non-maintenance of RG-I register.Issue 1:The case involved a dispute where the Department confirmed a demand of Central Excise duty without issuing a show-cause notice. The advocate for the appellants argued that such orders were illegal as they contravened Section 11A of the Central Excise Act, which mandates the issuance of a show-cause notice for duty recovery. The Tribunal noted that the appellants had waived the show-cause notice, and based on a careful reading of Section 11A, concluded that the orders of the lower authorities were not flawed due to the waiver, as a legal right can be waived.Issue 2:The waiver of the show-cause notice by the assessee was a crucial point of contention. The advocate cited a Tribunal decision stating that there was no provision for waiver of the notice under Section 11A. However, the Tribunal differentiated between a legal right and a fundamental right, noting that a legal right, like the one to waive a notice, can be exercised. The Tribunal found that the appellants had indeed waived the notice, which was within their legal right, thereby upholding the lower authorities' decision.Issue 3:The interpretation of Rule 233A regarding the issuance of a show-cause notice was also discussed. The Tribunal examined a decision where it was held that the Central Excise officer must issue a notice even if waived by the assessee. However, a proviso to Rule 233A allowed for oral notices and replies at the request of the concerned person. In this case, the appellants had waived the notice and personal hearing, and the Tribunal found no grounds to support the appellants' argument based on the cited decision.Issue 4:The advocate referenced a Supreme Court decision in a Customs matter to support their case. However, the Tribunal noted that no parallel was drawn between the Customs Act and the Central Excise Act in the present case. Consequently, the reliance on the Supreme Court decision was not accepted as applicable to the Central Excise Act.Issue 5:Regarding the penalty imposed for non-maintenance of the RG-I register, the Tribunal found the penalty of Rs. 10,000 to be excessive and disproportionate to the offense. The Tribunal reduced the penalty to Rs. 5,000, deeming it more appropriate in the circumstances. Apart from this adjustment, the impugned order was upheld, and the appeal was disposed of accordingly.