1995 (11) TMI 137 - AT - Central Excise

Summary

Issues:
Recovery of excise duty paid under protest, refund application, show cause notice for recovery under Section 11A, jurisdiction of Central Excise officer, wilful mis-statement and suppression of facts, appeal against show cause notice.

Analysis:
The appellant, a limited company manufacturing certain chemicals, was paying excise duty under protest from 3-4-1986 to 26-4-1986. A notification exempting certain chemicals from duty was issued by the Government on 3-4-1986. The appellant applied for a refund of Rs. 6,80,417.92 on 27-5-1986, which was partially granted by the Assistant Collector on 21-7-1986, subject to deduction. However, a show cause notice was issued on 7-11-1986 for recovery under Section 11A of the Central Excises and Salt Act, 1944, based on the appellant's letter mentioning customers claiming benefits under modvat scheme. The appeal to the Collector (Appeals) was dismissed, leading to the present appeal.

The relevant provision, Section 11A(1), deals with the recovery of excise duties not levied, short-paid, or erroneously refunded. The proviso to this section specifies cases involving fraud, collusion, misstatement, or suppression of facts, extending the time for issuing a show cause notice to five years and designating the Collector of Central Excise as the authority to issue such notices. In this case, the Central Excise officer initiated action based on wilful misstatement and suppression of facts, falling under the proviso, thus requiring the Collector to issue the show cause notice.

The show cause notice issued by the Central Excise officer, instead of the Collector, lacked jurisdiction, rendering the entire proceedings illegal. While the jurisdiction issue was not raised earlier in the proceedings, the Tribunal allowed the appellant to raise it, emphasizing that lack of jurisdiction cannot be waived. Consequently, the Tribunal set aside the impugned orders and allowed the appeal. The Assistant Collector was directed to implement the order within three months from the date of the judgment.