Service of show cause notice and limitation: postorder or noticeboard posting does not validate timebarred SCNs; relief granted.

Service of a show cause notice (SCN) must precede issuance of an adjudicatory order; SCN pasted on a departmental notice board after return from post does not constitute valid service. Where the SCN was served only after an order and beyond the extended fiveyear limitation for nonpayment or short payment of duty, the notice was timebarred and the order founded on it could not be sustained. The exception for fraud, collusion, willful misstatement or suppression was not invoked to defeat limitation. Consequently the impugned order was set aside and appeals allowed, with consequential relief to the appellants.

---

---

Issues: Whether the show cause notice dated 11.4.2011 was served within the permissible period under Section 11A of the Central Excise Act, 1944 and whether the impugned order passed pursuant to that notice is sustainable.

Analysis: The impugned adjudication proceeded on a SCN alleged to relate to clandestine removals during 1.4.2007 to 30.6.2007. Service of the SCN was attempted at the assessee's old address and, after postal return, the SCN was affixed on the department's notice board. The complete SCN and its annexures were in fact delivered to the appellants only on dates substantially later, the final relied-upon documents being served well beyond five years from 30.6.2007. Section 11A permits demand by serving an SCN within the normal two-year period and within an extended five-year period only where specified exceptions such as fraud or collusion are shown; no valid service can remedy an expired limitation. Service effected after issuance of the impugned order cannot substitute for service prior to adjudication and does not cure non-compliance with limitation requirements.

Conclusion: The SCN was served beyond the extended five-year limitation period under Section 11A of the Central Excise Act, 1944; the impugned order is unsustainable and is set aside, and the appeals are allowed in favour of the assessee.

---