Tribunal sets aside duty and penalty order, deeming show cause notice without jurisdiction

The Tribunal allowed the appeal, setting aside the impugned order imposing duty and penalty, as the show cause notice issued by the Superintendent of Central Excise was deemed without jurisdiction due to an amendment to Section 11A. The Tribunal held that only the Collector was authorized to issue such notices, rendering the impugned order legally untenable. The decision allowed for the department to pursue appropriate legal steps for levying the duty from the appellants despite the appeal's success.

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Issues:
1. Dispensing with prior deposit of duty and penalty imposed by the Collector of Central Excise, Bangalore.
2. Legality of the impugned order appealed against based on a preliminary question of law regarding the issuance of the show cause notice by the Superintendent of Central Excise.

Analysis:
1. The judgment pertains to applications filed for dispensing with the prior deposit of duty and penalty imposed by the Collector of Central Excise, Bangalore. The applications were filed in response to a common order dated 21-4-1986. The learned consultant for the petitioners contended that the impugned order suffered from legal infirmity. The Tribunal, after hearing both parties, decided to dispense with the prior deposit of duty and penalty pending the disposal of the appeals. The appeals were taken up for disposal on a preliminary question of law.

2. The appeals were directed against the order of the Collector of Central Excise, Bangalore dated 21.4.86, imposing duty and penalty on the appellants. The learned consultant for the appellants raised a preliminary question of law regarding the show cause notice issued by the Superintendent of Central Excise on 27-12-1985, invoking the extended period of limitation under Section 11A of the Central Excises and Salt Act, 1944. The Tribunal noted that the amendment to Section 11A, which came into operation on 27-12-1985, stipulated that only the Collector was the competent authority to issue show cause notices invoking the extended period of limitation.

3. After considering the submissions made by both parties, the Tribunal found that the show cause notice issued by the Superintendent of Central Excise was without jurisdiction due to the amendment to Section 11A. As per the amendment, only the Collector was authorized to issue such notices. Therefore, the Tribunal held that the impugned order based on the show cause notice was legally untenable. Consequently, the Tribunal set aside the impugned order and allowed the appeal. However, it was clarified that the order did not prevent the department from taking appropriate legal steps for the levy of the duty in question from the appellants.

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