1990 (11) TMI 284 - AT - Central Excise

CEGAT Appeal Success: Incorrect Authority for Show Cause Notice Invalidates Duty Order

SHANKAR ENGINEERING & TRADING CO. Versus COLLECTOR OF C. EX.

The Appellate Tribunal CEGAT, CALCUTTA allowed the appeal filed by M/s. Shankar Engineering & Trading Co. against an order demanding duty and imposing ... Demand - Limitation Issues: Lack of jurisdiction in issuing show cause notice under Section 11A of the Central Excises & Salt Act, 1944.In the case before the Appellate Tribunal CEGAT, CALCUTTA, the appeal was filed by M/s. Shankar Engineering & Trading Co. against an order passed by the Collector of Central Excise, Calcutta - II Collectorate, demanding duty and imposing a penalty under Section 11A of the Central Excises & Salt Act, 1944. The appellant's representative raised the issue of lack of jurisdiction on the part of the Assistant Collector to issue the show cause notice, as the notice was issued after an amendment had vested the power to issue such notices only with the Collector. The appellant sought permission to raise this jurisdictional issue before the Tribunal, even though it was not raised before the adjudicating authority. The respondent, however, opposed this argument, stating that as the notice was made answerable to the Collector and the order was passed by the competent authority, no illegality was involved. The Tribunal considered both arguments and referred to a previous decision regarding the acceptance of new grounds in appeals. It was noted that the appellants had sought permission to raise the jurisdictional issue, which was different from the previous case where additional evidence was sought without permission. The Tribunal allowed the appellants to raise the jurisdictional issue, citing previous judgments that show cause notices must be issued only by the Collector for invoking the longer period of limitation. The Tribunal referred to relevant case laws supporting this principle and allowed the appeal, setting aside the order based on the jurisdictional issue.The Tribunal's decision was based on the established principle that show cause notices invoking extended periods of limitation must be issued by the Collector, as per the proviso to Section 11A(1) of the Central Excises & Salt Act, 1944. The Tribunal allowed the appeal and set aside the order appealed against, emphasizing the importance of jurisdiction in issuing show cause notices. This ruling aligns with previous judgments and legal precedents that highlight the necessity for proper authorization when invoking extended periods for the recovery of duties. The Tribunal's decision underscores the significance of adhering to statutory provisions and ensuring that notices are issued by competent authorities to maintain the legality and validity of proceedings.