Jurisdiction under excise recovery law shifts to the Collector when fraud or wilful suppression is alleged; lower-officer action is invalid.

Where a show cause notice alleges fraud, collusion or wilful suppression of facts under the excise recovery scheme, the proviso to Section 11A(1) shifts authority from the ordinary excise officer to the Collector for both issuance of notice and adjudication. A notice framed under Rule 9(2) does not cure that jurisdictional defect if the substance of the allegation brings the case within the proviso. Proceedings initiated and decided by an Assistant Collector were therefore treated as without jurisdiction, and the departmental challenge failed.

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Issues: Whether a show cause notice alleging fraud and wilful suppression of facts, though framed in terms of Rule 9(2), had to be issued and adjudicated by the Collector under the proviso to Section 11A(1), and whether the Assistant Collector lacked jurisdiction to issue the notice and decide the matter.

Analysis: The notice specifically alleged fraud, wilful suppression of facts and intent to evade duty, and also covered demand of duty, penalty and confiscation. The governing scheme under Section 11A distinguishes ordinary short levy cases from cases involving fraud, collusion, wilful misstatement or suppression of facts. For such exceptional cases, the proviso substitutes the Collector of Central Excise for the ordinary Central Excise Officer both for issuance of notice and for adjudication. A composite notice issued without jurisdiction is not saved by the fact that it also relates to a limited period or is described under Rule 9(2). The notice and the proceedings flowing from it were therefore treated as lacking jurisdiction.

Conclusion: The Assistant Collector was not competent to issue or adjudicate the notice, the order of the Collector (Appeals) was in law, and the department's challenge failed.

Final Conclusion: The governing principle is that once the statutory allegation falls within the proviso to Section 11A(1), jurisdiction shifts to the Collector, and proceedings initiated or decided by a lower officer are invalid.

Ratio Decidendi: Where a show cause notice alleging fraud, collusion or wilful suppression of facts is issued under the excise recovery scheme, the proviso to Section 11A(1) vests authority in the Collector for both issuance and adjudication, and a contrary action by a lower officer is without jurisdiction.

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