Commissioner of Central Excise vs Su Beverages (P.) Ltd.

There was an intelligence report that the Assessee was indulge in suppressing from product the removing the same without payment of duty under the Central Excise Act, 1944 (the Act).

A team of the Excise Officer inspected the factory on 17-7-1996.

Subsequently on the basis of aforesaid inspection note, a notice u/s 11A of the Act was issued by the Assistant Commissioner on 6-11-1996 that why excise duty amounting to Rs. 3,18,302.68/- be not imposed on them and the penalty be also not imposed for violation of Rule 52A and Rule 177Q read with Rule 226 of the Central Excise Rules, 1944 (the Rules).

The Dy. Commissioner, Central Excise, Kanpur passed order dated 17-11-1997 confirming the dues and imposed penalty of rupees one lakh.

Aggrieved by the order, the Assessee filed an appeal. It was dismissed on 10/11-9-1998. The Assessee filed second appeal before the Customs, Excise & Gold (Control) Appellate Tribunal, New Delhi (the Tribunal).

The Tribunal by its order dated 14-10-1991 allowed the appeal on the ground that the notice u/s 11A contained allegation of clandestine removal of goods and as such the notice could not be issued by the Assistant Collector and can only be issued by the Collector.

The Excise Department (the Department) filed an application before the High Court u/s 35G for referring the question to this Court. This application was allowed on 21-5-2002 and the following two questions have been referred to the court for the opinion.

(i) Whether under the facts and circumstances of the case the show cause notice dated 6-11-1996 issued by Assistant Commissioner, Central Excise, Kanpur and the order-in-original dated 17-11-1997 passed by Dy. Commissioner (P & V), Central Excise, Kanpur are without jurisdiction as held by Tribunal?

(ii) Whether under the facts and circumstances of the case the Tribunal is justified in law in setting aside the show cause notice dated 6-11-1996 without looking into the contents of the said show cause notice which was not even on record before the Tribunal?

We have heard Sri S.P. Kesarwani, counsel for the Department. No one has put up appearance on behalf of the Assessee.

Notice u/s 11A of the Act can only be issued by the Collector of Central Excise. However, this provision has been amended by the Act No. 18 of 1992 with effect from 14-5-1992. The word ''Collector Central Excise'' has been substituted by the word ''Central Excise Officer''. The Central Excise Officer has also been defined in Sub-section (B) of Section 2 of the Act. It means the Officers mentioned in that Sub-section among other officer it also includes Assistant Commissioner, Central Excise as well as Dy. Commissioner, Central Excise.

In the present case, a notice has been issued by the Assistant Commissioner, Central Excise and the case has been decided by the Dy. Commissioner, Central Excise. Both of them were competent officers. In view of this there is no illegality in issuing the notice or deciding the case under the Act.

In view of the above, both the questions are answered in favour of the department and against the Assessee. Let our opinion be sent back to the Tribunal for deciding the case in pursuance of the same.

It is relevant to point out that the Tribunal while deciding the appeal of the Assessee by its order dated 14-10-1999 has not decided the case on merit. It would be open to the Tribunal to decide the case of the Appellant and the Assessee on merit and pass appropriate orders.

With these observations, the reference is answered.