TaxTMI 
TaxTMI 
1999 (2) TMI 339
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....alty of Rs. 2500/- on the respondents for contravention of the provisions under Rules 173B, 173C read with Rule 173F and 9(1) of the Central Excise Rules, 1944 under the provisions of the Rule 173Q(1) of the said Rules. He confiscated 37228 L.Mts of processed cotton fabrics valued at Rs. 22,173.64 under the provisions of Rule 173Q of Central Excise Rules. The party was called upon to produce the seized goods, but he has failed to do so and therefore, the Asstt. Collector has appropriated an amount of Rs. 5000/- towards the value from the cash security deposit. He also ordered that the party should pay differential duty amounting to Rs. 15,580/- on the processed fabrics already cleared by them by misdeclaring the width. On appeal filed by the party, the Collector (Appeals) set aside the Asstt. Collector's order and allowed the party's appeal. He accepted the contention of the party holding that the show cause notice issued to the assessee for violation of the provisions of Central Excise Rules, 1944 for confiscation of seized goods, for recovery of differential duty involving penal provisions of Central Excise Rules alleging fraud, wilful suppression of facts with intent to evade pa....
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....s of this Act or of the rules made thereunder with intent to evade payment of duty, by such person or his agent, the provisions of this sub-section shall have effect, as if, for the words "Central Excise Officer" the words "Collector of Central Excise" and for the words "six months", the words "five years" were substituted. 6. Section 11A(1) makes a clear distinction between cases where short levy has arisen by reason of fraud, collusion or any wilful mis-statement or suppression of facts, and cases where short levy is due to other reasons. In the former cases, however, with the amendment effective from 15-11-1980, by Section 21 of the Customs, Central Excises and Salt and Central Board of Revenue (Amendment) Act, 1978 and amended by Central Excise and Salt (Amendment) Act, 1985, Section 3a, the notice has to be issued by the Collector. In the latter case, the notice may be issued by any Central Excise Officer. Accordingly if the notice was issued alleging fraud, collusion suppression etc., it must be issued and adjudicated by the Collector and not by the Asstt. Collector. This is the view, precisely taken by the Tribunal in the earlier case of Pratap Rajasthan Copper Fo....
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.... 173-Q of Central Excise Rules, 1944." 9. In view of our foregoing conclusion and in view of the averments in the show cause notice as envisaged in proviso to Section 11A, Asstt. Collector was not empowered either to issue notice or to adjudicate and since the Asstt. Collector has exceeded the jurisdiction in adjudicating the show cause notice issued alleging fraud and wilful suppression of facts, the order passed by the Asstt. Collector is not sustainable as it was rightly held by Collector (Appeals). 10. Since we do not find any infirmity in the impugned order, we uphold the order passed by Collector (appeals) and in the result, appeal filed by the department is hereby dismissed. Sd./- (G.A. Brahma Deva) Member (J) 11.  [Contra per : J.H. Joglekar, Member (T)]. -For reasons mentioned below I do not subside to the views expressed by my learned brother Member (Judicial). 12. The show cause notice in this case was issued on 3-3-1987. In this notice the demand was for differential duty on the goods cleared from the factory from 4-9-1986 on account of variation in the declared width and the actual width. The demand was made in terms of Ru....
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.... Section 11A are the same as the definition of the relevant date, the nomenclature of the competent officer, etc. 18. While Section 11A has a general application and extends to where the goods had been assessed even at nil rate of duty, Rule 9(2) would apply only where the goods have escaped payment of duty due to clandestine removal as was held by the Supreme Court in the case of Assistant Collector of Central Excise v. The Elphinstone Spinning and Weaving Mills Co. Ltd. reported in 1978 (2) E.L.T. (J 399). The scope and coverage of Rule 9(2) was described by the Tribunal in their judgment in the case of Bridge and Roof Co. (I) Ltd. v. C.C.E., Calcutta reported in 1986 (24) E.L.T. 671 in the following words : "The learned Counsel for the appellants rightly relied on the ruling reported in 1984 (15) E.L.T. 211 (Supra) for the proposition that the clearance must have been in contravention of Rule 9(1). Such a contravention can be presumed only when the removal and the clearance were made with the intention to prevent payment of duty. In other words there must be deliberate secrecy in the manner of removal or deception practised by the assessee so that central excise autho....
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....ndia) Corporation reported in 1986 (25) E.L.T. 727 in the following words : " Relying on the Madras High Court judgment in the case of Murugan & Company reported at 1977 (1) E.L.T. (J 193), the appellants argued that Rule 9 (2) could not be applied unless there had been specification of the time, place and manner under Rule 9 (1) which had not been done in their case, and secondly, Rule 9 (2) could not be invoked for the purpose of recovering escaped revenue; the only provision available under the Act for such recovery was Section 11A which had not been cited in the show cause notices issued to them. We find no substance in their arguments. The appellants 'unit was duly licensed under the Central Excise Act and Rules for all the commodities manufactured by them and we take it that the attendant formality of approving the ground plans must have been gone through also. The time, place and manner for payment of duty by the licensed assessees are set out in the Rules (9, 9A, 49 etc.) for information and compliance of all the assessees. So far as the blended wool tops are concerned, the time, place and manner were further specified in the Collector's trade notice dated 3-12-1980. Sec....
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....Joglekar) Member (T) In view of the difference of opinion between the two Members of the Bench, the matter is submitted to the Hon'ble President for reference to a third Member on the following point :- "Whether in the facts and circumstances of the case, the Assistant Collector was not empowered either to issue notice or to adjudicate the matter even for six months since show cause notice issued alleging fraud and wilful suppression of facts as envisaged under Section 11A of the Act, as it was held by the Member (Judicial)                  OR The Assistant Collector was within his jurisdiction to adjudicate the matter as demand was raised under Rule 9(2) and other ingredients except time factor of Section 11A are not required to be imported into this Rule, as per the Member(Technical)." Sd./- (G.A. Brahma Deva) Member (J) Dated : 9-6-1997 Sd./- (J.H. Joglekar) Member (T) 25. [Order per : Lajja Ram, Member (T)]. - The difference of opinion referred to me in this appeal filed by the Revenue (in which the respondents are M/s. Omkar Textile Mills (P) Ltd.) is as....
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....ral Excise. 28. The Collector of Central Excise (Appeals) in the present case had observed that the Asstt. Collector of Central Excise by issuing the show cause notice in which there was allegation of fraud and wilful suppression of facts, had acted in excess of his jurisdiction in adjudicating the matter. The learned Member (J) had observed that in view of the averment in the show cause notice as envisaged in Proviso to Section 11A of the Act, the Asstt. Collector was not empowered either to issue notice or to adjudicate, and that since the Asstt. Collector had exceeded the jurisdiction in adjudicating the show cause notice issued alleging fraud and wilful suppression of facts, the order passed by the Asstt. Collector was not sustainable. 29. I find that the matter is covered by the Supreme Court decision in the case of Collector of Central Excise, Indore v. Oil & Natural Gas Commission, 1998 (103) E.L.T. 3 (S.C.). The Supreme Court while disposing of Civil Appeal No. 6388 of 1995 had referred to the fact that the show cause notice dated 25-11-1986 demanding Central Excise duty for the period March, 1986 to 25-8-1986 was issued by the Superintendent of Central Exci....