1989 (6) TMI 215 - AT - Central Excise

Summary

Issues:
1. Validity of passing an Order-in-Original without issuing a Show Cause Notice.
2. Interpretation of remand orders by the Collector (Appeals).
3. Jurisdiction of the Appellate Collector in passing orders beyond the scope of the appeal.
4. Compliance with principles of natural justice in the proceedings.
5. Legal implications of passing orders without a valid Show Cause Notice.

Analysis:
1. The case revolved around the validity of passing an Order-in-Original without issuing a Show Cause Notice. The Learned Counsel argued that the impugned order was passed without a Show Cause Notice, which was upheld by the Collector (Appeals) despite being pointed out. The Assistant Collector had initially issued a Show Cause Notice in 1978, dropped proceedings in 1981, and later issued a demand in 1981 without a new Show Cause Notice, leading to the appeal.

2. The Collector (Appeals) observed that passing an order based on the same Show Cause Notice twice was legally flawed. The Assistant Collector was directed to proceed in accordance with the law and issue a fresh Show Cause Notice. However, the department argued that since the earlier orders were set aside but the Show Cause Notice was not quashed, it survived, and no new notice was required during the remand proceedings.

3. The Appellate Collector's jurisdiction in remanding the case back to the Assistant Collector was questioned. It was argued that the Assistant Collector's first order had become functuous officio, making the subsequent order a nullity. The Appellate Collector's order beyond his jurisdiction was deemed improper and without legal basis.

4. Compliance with principles of natural justice was a crucial aspect of the case. The Assistant Collector granted a hearing to the appellants in 1984, ensuring that due process was followed. The Learned Collector (Appeals) upheld the order based on the observed compliance with natural justice principles.

5. The judgment concluded that the impugned orders were set aside as they were passed without a valid Show Cause Notice. The Appellate Collector's order was deemed improper due to overstepping jurisdiction. The decision emphasized the importance of legal procedures and the necessity of following due process, ultimately leading to the acceptance of the appeal and the setting aside of lower authorities' orders.