Show cause notice for differential excise duty remains valid where assessee withheld key data, but demand is limited by limitation.

A show cause notice for differential central excise duty was not vitiated merely because it did not state the exact quantified demand or precise dates where the assessee alone controlled the relevant clearance data and had withheld it despite repeated requisitions. The notice was treated as sufficiently clear because it set out the basis of the demand with adequate particularity under Rule 10 of the Central Excise Rules. The duty demand was also sustained in principle, but its enforceability was confined to the five-year period preceding the notice, with the earlier period set aside on limitation grounds.

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Issues: (i) Whether the show cause notice demanding differential central excise duty was invalid for not specifying the amount and the period of demand; (ii) whether the demand could nonetheless be sustained, subject to limitation, in the facts of the case.

Issue (i): Whether the show cause notice demanding differential central excise duty was invalid for not specifying the amount and the period of demand.

Analysis: The notice proceeded on allegations that the assessee had wrongly availed exemption and had failed to furnish the assessable value of clearances despite repeated requisitions. The decisive question was whether, in a case where the assessee alone possessed the relevant information and withheld it, omission to state the exact amount in the notice was fatal under Rule 10 of the Central Excise Rules. The view accepted by the majority was that the notice contained the basis of the demand with sufficient particularity, and that the absence of a quantified figure did not by itself render the notice void in these exceptional circumstances.

Conclusion: The notice was not invalid merely because it did not quantify the demand or set out the period in exact dates.

Issue (ii): Whether the demand could nonetheless be sustained, subject to limitation, in the facts of the case.

Analysis: The demand related to differential duty on removals made after the relevant exemption notifications and was treated as arising from a continuing misdeclaration coupled with non-disclosure of material particulars. The final order accepted the departmental demand in principle, but confined enforceability of the duty to the period of five years preceding the show cause notice, setting aside the balance for the earlier period.

Conclusion: The demand was upheld, but only to the extent of the five-year period preceding the show cause notice.

Final Conclusion: The appeal failed on the challenge to the validity of the notice, while limited relief was granted on the temporal reach of the demand, resulting in only the older portion of the duty demand being set aside.

Ratio Decidendi: In an exceptional excise case where the assessee alone possessed the information necessary to compute the differential duty and withheld it despite repeated requisitions, a show cause notice under Rule 10 is not vitiated merely because it does not state the exact quantified amount, if the basis of demand is otherwise set out with sufficient clarity.

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