Show cause notice is mandatory in central excise demand proceedings; waiver by assessee does not cure the defect.

Demand proceedings for central excise duty under Section 11A read with Rules 9 and 49 were invalid where no show cause notice had been issued. The statutory requirement of notice was treated as basic and fundamental to the validity of confirmation of short levy and penalty, and the absence of notice was a defect not capable of cure. An alleged waiver by the assessee did not remove the Department's obligation to issue notice before proceeding.

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Issues: Whether a demand for central excise duty could be confirmed and penalty imposed without issuance of a show cause notice, despite an alleged waiver by the assessee.

Analysis: The proceedings concerned confirmation of short levy under Section 11A of the Central Excise Act, 1944 read with Rules 9 and 49 of the Central Excise Rules, 1944. The record showed that no show cause notice had been issued and that the Department's obligation to issue notice remained unfulfilled. The statutory requirement of notice was treated as basic and fundamental to the validity of demand proceedings. The absence of notice was held to be a fundamental defect not capable of being cured, and the assessee's alleged waiver did not remove the Department's statutory responsibility.

Conclusion: The demand proceedings were unsustainable for want of show cause notice and the objection of the assessee succeeded.

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