Show cause notice is mandatory before excise demand confirmation; absence of notice makes the demand unsustainable.

Under the Central Excise Act, confirmation of duty demand required prior issuance of a show cause notice and an opportunity to respond before any penalty could be imposed. The Tribunal held that notice under Section 11A read with Rules 9 and 49 of the Central Excise Rules was basic and fundamental to the validity of the proceedings, and the admitted absence of both show cause notice and personal hearing rendered the demand unsustainable. It further held that this defect was not curable and could not be waived by the assessee, because the Department's statutory obligation remained intact.

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Issues: Whether a demand for central excise duty could be confirmed without issuing a show cause notice and without affording an opportunity to explain the proposed demand and penalty.

Analysis: The Department admitted that no show cause notice and no personal hearing were given. The Tribunal held that, for proceedings under the Central Excise Act, issuance of a show cause notice under Section 11A read with Rules 9 and 49 of the Central Excise Rules was basic and fundamental before confirmation of demand. It further held that the absence of such notice was not a curable defect and that a waiver by the party could not relieve the Department of its statutory obligation. Relying on settled precedent, the Tribunal concluded that demands confirmed without notice could not be sustained.

Conclusion: The demand was unsustainable for want of show cause notice and the preliminary objection succeeded in favour of the assessee.

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