TMI Blog2010 (2) TMI 557X X X X Extracts X X X X X X X X Extracts X X X X ..... Excise duty at the rate of Rs. 300/- per metric tonne per month by availing the benefit of Compound Levy Scheme under Section 3A of the Central Excise Act, 1944 (for short "the Act") and sub-Rule 3 of Rule 96 ZP of Rule 3 of the Central Excise Rules, 1944 (hereinafter to be referred as " the Rules"). The assessee ostensibly availed the benefit of abatement under sub-section (3) of Section 3-A of the Act to the tune of Rs. 3,05,956/- for the period October and November 1998 and Rs. 5,25,117/- for the period January, 1999 to May, 1999. 2. The revenue claimed that the assessee did not pay the duty, therefore, show cause notices were issued as to why the duty short paid/not paid be not demanded under Section 11A of the Act and Rules alongwith interest. The imposition of penalty was also proposed under Rule 96ZP of the Rules. In the wake of show cause notices, the assessee filed the reply, in which it admitted the non-payment of duty, but tried to explain that the short payment was on account of difference of opinion, as the assessee claimed the relief for the period when its unit remained closed for more than seven days continuously under section 3A(3) of the Act and this benefit cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had been demanded under sub-rule (3) of Rule 96ZP. The Tribunal, while deciding the first issue has, held that as per Circular dated 27-2-1999, only Assistant Commissioner was competent to issue the notices and as the Superintendent was not at all competent to issue show cause notices, so the proceedings taken on the strength of these show cause notices stand vitiated. The Tribunal answered the second issue as under : "But in the instant case this is not the position. No penalty as observed above has been imposed under sub-rule (3) of Rule 96ZP under which differential duty had been demanded from the appellants. Rather penalty has been imposed under another sub-rule i.e. 1(A) of Rule 96ZP under which no duty had been demanded from the appellants." 8. It means, question of valuation of the goods does not arise, only law points (legal interpretations) are involved in this appeal. Moreover, the present appeal was admitted to decide the following substantial question of law :- "Board's Circulars being administrative circulars, whether such circulars could take precedence over the Notification and Show Cause Notices issued by virtue of Notifications, rendering the Show Cause Noti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ake, the same will have to be consistent with the circular, which is in force at the relevant point of time. At the same time, it was also observed that however, the assessee can challenge the validity and legality of departmental instructions. 14. After considering the matter deeply, we are of the view that the observations in Paper Products Ltd.'s case (supra) would not come to the rescue of the assessee in this respect, in view of the law laid down by the Hon'ble Supreme Court in Pahwa Chemicals Pvt. Ltd.'s case (supra). Having interpreted the relevant provisions, it was ruled in para Nos. 12, 13 and 14 as under :- "12. As noted above, the Legislature has purposely omitted the word "Collector" from the proviso to Section 11A and replaced it with the words "Central Excise Officer". It is the Act which confers jurisdiction on the concerned Officer/s. The Act permits Central Excise Officer to issue the show cause notices even in cases where there are allegations of fraud, collusion, willful misstatement and suppression of facts. The question therefore is : Can the Board override the provisions of the Act by issuing directions in the manner in which it is done and if the Board c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed 25th June, 2003 inter alia, held as follows : " .....Further, at the relevant time as per the provisions of Section 11A(1) proper officer which includes Superintendent is competent to issue the show cause notice. Board's Circular is only the administrative direction which does not cause any prejudice to the Appellants…..." In our view this is absolutely correct. We, therefore, see no infirmity in the judgment dated 25th June, 2003. We hold that the Superintendent had jurisdiction to issue show cause notice and the Deputy Commissioner had jurisdiction to adjudicate." 15. Meaning thereby, it has been authoritatively held by the Hon'ble Supreme Court that the Superintendent had jurisdiction to issue show cause notice and the Deputy Commissioner had jurisdiction to adjudicate the matter. Therefore, in view of the pronouncement of the Hon'ble and Apex Court, it is held that there is no legal infirmity in issuing show cause notices by the Superintendent to the assessee in the present case as well. Hence, the contrary findings recorded by the Tribunal deserve to be and are hereby reversed. 16. As regards the question of determination of non-payment of duty and on that account ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and Rajasthan Spinning Weaving Mills's cases (supra) it was held as under : - Re : Questions Nos. 2 3 However, on the aforesaid two questions, the judgment rendered by the Hon'ble Supreme Court in Dharamendra Textiles case (supra), has direct hearing. It has been categorically held that Rule 96 ZO and 96ZQ of the Rules do not contemplate exercise of discretion and the plea that the Rules have inbuilt concept of discretion, has been rejected. Hon'ble the Supreme Court has specifically overruled the judgment rendered in Dilip N. Shroff v. Joint Commissioner of Income Tax, 2007 (219) E.L.T. 15. In that case it was held that an element of mens rea was necessary before penalty could be imposed. However, in Dharamendra Textiles case (supra), the aforesaid view has been overruled on the ground that it has failed to take into account the provisions of Section 271(1)(c) of the Income Tax Act, 1961. It has been laid down that the aforesaid provision was rightly interpreted in the case of Chairman, SEBI v. Shriram Mutual Fund, 2006 (5) SCC 361. Accordingly, in the concluding part. Hon'ble the Supreme Court in Dharamendra Textile's case (supra) has held as under : - "Above being the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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