Customs, Excise and Gold Tribunal - Delhi
Agrasen Engineering Works vs Collector Of Central Excise on 1 September, 1989
Equivalent citations: 1990ECR246(TRI.-DELHI), 1990(47)ELT90(TRI-DEL)
ORDER I.J. Rao, Member (T)
1. In effect this application is one seeking modification of an earlier stay order dated 30-8-1989 passed by the Bench. It is treated as such.
2. Shri Gujral the learned Advocate argued on a number of grounds. For reasons that will be clear a little further we are not going into any of the grounds. Consideration of those grounds is not necessary for the purpose of this matter.
3. The circumstances leading to this application are peculiar and exceptional in that certain vital points relevant to the stay application appear to have been lost might of even by the appellants themselves.
4. The basic facts and arguments necessary for the disposal of this appeal are that a show cause notice was issued to the appellants seeking to recover duty for the period 1980-81 to 1985-86 (upto 24-1-1986) on 15-7-1986 followed by a "Memo of Charges" dated 7-11-1986. There is no dispute that this show cause notice was signed by the Deputy Collector. It is Shri Gujral's argument that under Section 11A of the Central Excises and Salt Act (the Act for short) as it stood after the amendment by Central Excises and Salt Amendment Act, 1985 the show cause notice which sought to recover duty for more than six months, alleging violation of Rules, suppression etc. on the part of the appellants should have been, legally, signed and issued only by the Collector and not any other authority. Shri Gujral cited a judgment of the Gujarat High Court Gujarat State Fertilizer Company Ltd. v. Union of India [1989 (34) E.L.T. 442 (Guj.)] to support his argument. The learned Advocate gave particulars of 7 other orders passed by the Tribunal followig this order. In these it was decided that where a show cause notice was issued by an authority other than the Collector demanding duty under the proviso to Section 11A the notice was void if issued under the amended Section 11A of the Act. He also brought to our notice a very recent judgment of the Tribunal in Order No. 393/89-C, dated 11-8-1989 which not only took this view but further held that even if the period is six months, if there is allegation of fraud etc. such show cause notice can be issued only by the Collector and none else. The learned Advocate, therefore, submits that as there is prima-facie no valid show cause notice, the insistance on the pre-deposit of any amount by the applicants would be unjust and unfair.
5. Shri Tayal submits that a Bench of the Tribunal having decided the stay application earlier, the present application could be considered only in respect of financial hardship and not on the basis of merits. Shri Tayal also submits that even if a show cause notice is void the subsequent proceedings will not necessarily be void and seeks to rely on a judgment of the Superme Court in State of Maharashtra v. Natwarlal D. Soni [1983 (13) E.L.T. 1620 (S.C.)]. The learned SDR also expressed apprehension that if such applications are dealt with on merits there may be no end to the stay applications causing a burden on the Bench and also on the Department.
6. We have considered the arguments of both sides. The facts regarding the show cause notice, the signatory thereof and the period of demand are all undisputed. There is no denial that in similar cases prima-facie view was taken that such show cause notices, not having been signed according to the provisons of Section 11A of the Act are void. We see the genuineness of the anxiety expressed by Shri Tayal. Repeated applications cannot be encouraged. But there may be exceptional cases with peculiar facts and circumstances wherein in the interests of justice matters have to be heard again and again. Such matters would be very few and the present matter is one of such exceptional nature.
6A. These proceedings are in effect, an examination of the necessity to modify the earlier orders of the Tribunal. The Gujarat High Court judgment, and the series of judgments cited by the learned Advocate cannot be lost sight of. In the light of the ratio of these judgments, it appears that the show cause notice issued by the Deputy Collector in this matter is, prima-facie not maintainable. In these prima-facie circumstances, we, in modification of all earlier orders passed in this regard, order that the pre-deposit of the adjudged amount be waived and stay granted thereon during the course of these proceedings.
7. Shri Gujral pleads for early hearing. He has been advised to make an application in this regard.
8. The miscellaneous application is disposed of in these terms. The learned SDR can argue about the validity of the proceedings when the appeal is taken up.