Gujarat High Court
Gujarat State Fertilizers Co. Ltd. And ... vs Union Of India (Uoi) And Ors. on 11 February, 1988
Equivalent citations: 1989(20)ECC129, (1988)1GLR516
Author: A.M. Ahmadi
Bench: A.M. Ahmadi
JUDGMENT A.M. Ahmadi, J.
1. Rule. Mrs. Mehta waives service of rule on behalf of the respondents. By consent heard to-day.
2. By the impugned show cause notice dated 15th January, 1987 the Superintendent of Central Excise & Customs, Baroda, has called upon the petitioner to show cause why the duty of excise for the period from 1st January, 1981 to 30th November, 1986 amounting to Rs. 73,49,298-89 ps. not paid by them on the losses of synthesis gas/ammonia should not be recovered from them and why penalty should not be imposed on them under Sub-rule (1) of Rule-173 Q of the Central Excise Rules, 1944. This notice has been issued under the signature of the Superintendent of Central Excise & Customs, Baroda. The notice is challenged on several grounds, one of which is that the Superintendent had no power or authority to issue the notice which covers a period exceeding six months in view of the proviso to Section 11A of the Central Excises and Salt Act, 1944 (hereinafter called "the Act").
3. Section 11A of the Act provides that when any duty of excise has not been levied or paid, a Central Excise Officer may, within six months from the relevant date, serve notice on the person chargeable with the duty which has not been levied or paid requiring him to show cause why he should not pay the amount specified in the notice. Under this sub-section power has been conferred on a Central Excise Officer to serve notice on the person chargeable with the duty which has not been levied or paid to show cause why he should not pay the same. The notice must be issued within six months from the relevant date, the expression "relevant date" having been defined in Clause (ii) of Sub-section (3) of that Section. We then come to the proviso which refers to cases of fraud, collusion or wilful misstatement or suppression of facts or contravention of any of the provisions of the Act or the Rules made thereunder with intent to evade payment of duty, etc. Under this proviso where any duty of excise has not been levied or paid by reason of fraud, collusion or any wilful misstatement or suppression of facts, or contravention of any of the provisions of the Act or the Rules made thereunder with intent to evade the payment of duty, the provisions of the sub-section will 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" are substituted. Since the period in respect of which the duty is demanded exceeds six months, there can be no doubt that the Department proposes to invoke the proviso to Sub-section (1) of Section 11A of the Act. As pointed out above, the duty sought: to be recovered is for the period from 1st January, 1981 to 30th November, 1986, that is, for a period exceeding six months from the relevant date. Mrs. Mehta was, therefore, unable to contend that the Department had not invoked the proviso to Sub-section (1) of Section 11A of the Act. That being so, in view of the proviso, the words "Collector of Central Excise" have to be read in Sub-section (1) for the words "Central Excise Officer". Once we substitute the words "Collector of Central Excise" for the words "Central Excise Officer" in Sub-section (1) of Section 11A, it becomes obvious that the Collector of Central Excise only can issue a show cause notice if the Department seeks to invoke the proviso to Sub-section (1) of Section 11A of the Act. In this view that we take, we are of the opinion that the impugned notice is illegal and in contravention Sub-section (1) of Section 11A of the Act.
In the result, this petition succeeds. The impugned notice dated 15th January, 1987, Annexure X to the petition, is quashed and set aside. The rule is made absolute to that extent only. There will be no order as to costs.