1995 (10) TMI 154 - AT - Central Excise

Appeals on Excise Duty Orders: Jurisdiction, Penalties, and Demands Upheld.

HIRDHAN TEXTURISING INDUSTRIES Versus COMMR. OF C. EX. & CUS., BARODA

HIRDHAN TEXTURISING INDUSTRIES Versus COMMR. OF C. EX. & CUS., BARODA - 1996 (84) E.L.T. 555 (Tribunal) Issues:1. Jurisdiction of the Deputy Collector/Additional Collector to adjudicate on the show cause notices.2. Validity of the show cause notices dated 7-3-1983.3. Authority of the Additional Collector to adjudicate under Section 11A.4. Liability of the appellants to pay duty on base yarn.5. Interpretation of the orders dated 13-3-1989 by the Collector (Appeals).Jurisdiction of the Deputy Collector/Additional Collector to adjudicate on the show cause notices:The appeals arose from orders confirming demands and penalties against two appellants for manufacturing and removing crimped yarn without paying excise duty. The Deputy Collector initially confirmed the demands, which were later challenged before the Collector (Appeals). The Collector (Appeals) remanded the matters for de novo adjudication, emphasizing that the Deputy Collector lacked jurisdiction to pass orders beyond six months. The Deputy Collector reconfirmed the demands, leading to further appeals. The subsequent Additional Collector's orders were challenged on the basis of jurisdiction, but the Additional Collector upheld the demands. The legal representative for the appellants argued the illegality of the proceedings based on the show cause notice dated 7-3-1983, citing relevant case law. However, the JDR contended that the Additional Collector had the authority to adjudicate under Section 11A.Validity of the show cause notices dated 7-3-1983:The show cause notices dated 7-3-1983 were issued by the Superintendent of Central Excise and were adjudicated upon by the Deputy Collector before the amendment of Section 11A in 1985. The Collector (Appeals) remanded the matters for de novo adjudication, directing compliance with the amended provisions. The subsequent proceedings were conducted by the Deputy Collector, leading to challenges regarding the validity of the show cause notices. The Collector (Appeals) did not declare the notices void, and the demands raised under them were not dropped. The orders emphasized compliance with statutory provisions rather than invalidating the notices themselves.Authority of the Additional Collector to adjudicate under Section 11A:The amended Section 11A required the Collector to adjudicate, and case law supported the Additional Collector's authority to adjudicate under Section 11A. The argument against the Additional Collector's authority was not sustained based on legal precedents and statutory provisions.Liability of the appellants to pay duty on base yarn:The appellants contended that duty on base yarn was exempt under a specific notification, and they provided details of the procurement of base yarn from the open market. The authorities demanded duty on the base yarn, stating lack of evidence of duty payment. Legal arguments and case law were presented to support the appellants' position. The authorities upheld the duty on base yarn, but the decision was challenged based on legal interpretations and evidence presented.Interpretation of the orders dated 13-3-1989 by the Collector (Appeals):The orders dated 13-3-1989 by the Collector (Appeals) were interpreted as remanding the matters for compliance with Section 8 of the Amending Act of 1985, rather than invalidating the show cause notices. The orders were seen as implementing statutory provisions rather than declaring the notices void. The subsequent proceedings were deemed in conformity with statutory provisions based on the interpretation of the Collector (Appeals) orders.In conclusion, the judgment addressed various issues related to jurisdiction, validity of notices, authority of the adjudicating officers, liability of the appellants, and interpretation of previous orders. The decision partially allowed the appeals, directing a rework of the demands considering the base yarn as duty paid, and requiring the appellants to make payments accordingly.