TaxTMI 
TaxTMI 
2018 (10) TMI 2057
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....of 1944') by invoking the extended period of five years and as to why the amount already deposited of Rs. 51,05,157/-be not appropriated against the said demand, and also for showing cause for recovering interest under Section 11AB/11AA of the Act of 1944 and as to why penalty under Section 11AC/sub-section 1(a) of Section 11AC of the Act of 1944 be not imposed upon the petitioners. 2. Petitioner No. 1 is a Company engaged in manufacture of excisable goods such as MS Ingots and various Rolled Products like Angles, Channels, CDT Bars, MS TMT Bars and is said to have been regularly paying central excise duty in accordance with the Act of 1944 and the Central Excise Rules in respect of the aforesaid business. Petitioner No. 2 is said to be the Director of the said Company. 3. The Commissioner, Central Excise, issued a show cause notice dated 30-6-2014 under the proviso to Section 11A / sub-section (4) of Section 11A of the Act of 1944 after conducting the search proceedings on 12-4-2014 which is to be received by the petitioners on 7-1-2015, for showing cause as to why the aforesaid amount be not recovered under the proviso to Section 11A / sub-section (4) of Secti....
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.... to explain as to why the purchase of raw material, production of excisable goods and clearance of the same which reflect from the records and documents recovered from the petitioners' premises do not find place in the specified records as well as the returns filed by them before the Central Excise Department. "Specified records" has been defined in clause (c) to Explanation 1 of sub-section (15) of Section 11A of the Act of 1944 as records including computerised records maintained by the person chargeable with the duty in accordance with any law for the time being in force. Therefore, the writ petition deserves to be dismissed. 5. Rejoinder has been filed opposing the reply filed by the respondent Union of India. 6. Mr. Kishore Shrivastava, learned Senior Counsel appearing on behalf of the writ petitioners assisted by Mr. Vinay Kumar Jain, Advocate, would submit as under:- i. The impugned show cause notice has been issued by wrongly and inappropriately invoking the extended period of limitation provided under Section 11A(4) of the Act of 1944, therefore, it is without jurisdiction and without authority of law, as Section 11A(4) applies only to the reopening of a....
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....show cause notice be quashed. 7. Mr. Maneesh Sharma, learned counsel appearing for the respondent / Union of India, would submit as under:- i. The writ petition as framed and filed is not maintainable since the same has been directed against the show cause notice and courts should be reluctant to interfere at the stage of show cause notice. Reliance has been placed upon the following judgments to buttress his submission in this regard:- ⮚ Trade Tax Officer, Saharanpur v. Royal Trading Co. [(2005) 11 SCC 518]. ⮚ Union of India and another v. Kunisetty Satyanarayana [(2006) 12 SCC 28]. ⮚ Indo Asahi Glass Co. Ltd. and another v. Income Tax Officer and others [(2002) 10 SCC 444]. ⮚ Special Director and another v. Mohd. Ghulam Ghouse and another [(2004) 3 SCC 440]. ⮚ Commissioner of Income Tax, Gujarat v. Vijaybhai N. Chandrani [(2013) 14 SCC 661]. ⮚ State of Uttar Pradesh v. Brahm Datt Sharma and another [(1987) 2 SCC 179]. ⮚ Union of India v. Bajaj Tempo Limited and others [(1998) 9 SCC 281]. ⮚ Surya Alloy Industries Ltd. v. Union of India [2014 (....
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....tioners herein is to file reply to the show cause notice and their grievance would be considered by the notice issuing authority in accordance with law. Whereas, it is the case of the petitioners that the show cause notice issued by the Commissioner, Central Excise & Customs, is apparently without any jurisdiction and without authority of law, as it has been issued palpably without any authority and relied upon the decision rendered by the Supreme Court in the matter of Calcutta Discount Co. Ltd. v. Income-Tax Officer, Companies District I, Calcutta [AIR 1961 SC 372]. 11. In Calcutta Discount Co. Ltd. (supra), Their Lordships of the Supreme Court have clearly and unmistakably held that the High Court in appropriate cases has power and jurisdiction to issue an order prohibiting the Income Tax Officer from proceeding to reassess the income when the conditions precedent do not exist. K.C. Das Gupta, J, speaking for the Supreme Court and delivering the majority judgment held as under:- "It is well-settled however that though the writ of prohibition or certiorari will not issue against an executive authority, the High Courts have power to issue in a fit case an order prohibi....
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....tor of Customs, Calcutta [AIR 1962 SC 1893], the question for consideration before the Supreme Court was, whether the petition filed under Article 226 of the Constitution for the issue of a writ in the nature of prohibition is maintainable and while examining the issue to initiate proceeding under Section 167(8) of the Sea Customs Act read with Section 3(2) of the Act, Their Lordships held as under:- "27. ... If on a reading of the said notice, it is manifest that on the assumption that the facts alleged or allegations made therein were true, none of the conditions laid down in the specified sections was contravened, the respondent would have no jurisdiction to initiate proceedings pursuant to that notice. To state it differently, if on a true construction of the provisions of the said two sections the respondent has no jurisdiction to initiate proceedings or make an inquiry under the said sections in respect of certain acts alleged to have been done by the appellants, the respondent can certainly be prohibited from proceeding with the same. We, therefore, reject this preliminary contention." 14. The decisions rendered by the Supreme Court in Calcutta Discount Co. Ltd. ....
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....n Calcutta Discount Co. vs. I.T. Officer, AIR 1961 SC 372, East India Commercial Co. vs. Collector of Customs, AIR 1962 SC 1893, and N. B. Sanjna vs. E. S. and W. Mills, AIR 1971 SC 2039, held that it is settled law that if a notice issued by Tribunal or Authority threatening to initiate proceedings prejudicial to a person is on admitted facts, in excess of jurisdiction, the Tribunal or Authority can be prohibited from further proceeding in the matter under Article 226 to save unnecessary harassment of the person concerned. In Hindustan Electro Graphites Ltd. vs. Union of India, 1990 (50) E.L.T. 15 M. P., this court has followed the decision in Universal Cables Ltd. case. There is therefore no doubt that if it is shown that the Respondents were not entitled to apply extended limitation of 5 years under the proviso to section 11-A of the Act, this court can interfere and quash the show cause notice on the ground that it was issued beyond limitation and was therefore without jurisdiction." 17. Thus, on the conspectus of the above-stated decisions referred herein-above, irresistible inference that follows is that writ court may not exercise its discretionary jurisdiction in enterta....
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....spondent that too without any protest or demur and without reserving any right to question legality, validity and correctness of the show cause notice issued on that behalf to the petitioners. As such, the petitioners have submitted to the jurisdiction of that authority by making a request for granting the opportunity of cross-examining their witnesses and that has been allowed favourably which they availed and also the requested documents sought for have also been supplied. It is the categorical statement made on behalf of the petitioners as reflected in Annexure P-2 that cross-examination of Department witnesses is necessary to file efficacious reply to the show cause notice. Opportunity of cross-examination was availed by the petitioners by making an application way back on 11-3-2015 and thereafter also. It appears that when cross-examination of Department witnesses is complete and documents are supplied, the petitioners have filed the writ petition way back on 15-3-2018. The competent officer / Director of the petitioner Company has also made a statement under Section 14 of the Act of 1944. 21. Once the petitioners have submitted to the jurisdiction of the respondent authori....
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....ein and shall be entitled for all the procedural rights available to them in accordance with law and according to the respondent, the show cause notice has been issued on the basis of documents seized under Panchnama proceeding and correctness, reliability and relevancy of the documents will be tested in the adjudication proceeding after affording opportunity of hearing in accordance with law, to the petitioners. 24. The application of extended period of limitation under Section 11(5) of the Act of 1944 has been questioned by the petitioners holding that Section 11(5) of the Act would not apply, whereas it is the stand of the respondent that it has rightly been applied and invoked. The adjudication in that behalf necessarily involves disputed questions of fact which require investigation, which cannot be gone into competently in extraordinary jurisdiction under Article 226 of the Constitution of India. 25. The petitioners' contention that the respondent authorities have prejudged the issue as they have already applied their mind and alleged enquiry is only an eyewash cannot be accepted. The petitioners having received the show cause notice as early as on 8-7-2014, the sai....