1998 (9) TMI 283 - AT - Central Excise

Summary

Issues:
1. Validity of service of show cause notice.
2. Applicability of Notification No. 230/77-C.E.

Issue 1: Validity of service of show cause notice

The case involved a dispute regarding the service of a show cause notice dated 17-7-1985 on the appellant firm or its partner. The Department claimed that the notice was served personally on the wife of the partner, who acknowledged to pass it on to her husband. The appellants contested this service as inadequate. The adjudicating authority confirmed the service based on the acknowledgment from the partner's wife. The Tribunal analyzed the situation, citing Rule 204 of Central Excise Rules, emphasizing that if a notice is duly received by a person's wife, it can be considered as received by the addressee. The Tribunal concluded that the notice was validly served, rejecting the appellants' argument of non-service as a delay tactic. Consequently, the adjudication proceeded ex parte due to the appellants not raising any other points before the authority.

Issue 2: Applicability of Notification No. 230/77-C.E.

The appellant contended that their fabric, being 100% cotton and unprocessed, was exempt under Notification No. 230/77-C.E. dated 15-7-1977. They argued that the fabric did not fall under the proviso of the notification, which excluded certain categories of cotton fabrics. The appellant highlighted that the notification required both conditions of the proviso to be satisfied for denial of benefits. They criticized the adjudicating authority for not considering the applicability of this notification. In response, the JDR argued that the appellants focused only on the technicality of non-service of notice and should not be allowed to argue on merits at this stage. The Tribunal noted that the appellants had not replied except on the issue of notice service. Considering the importance of the notification to the case, the Tribunal set aside the impugned order and remanded the matter to the adjudicating authority. The appellants were granted the opportunity to file a reply to the show cause notice on merits within two months for a fresh decision based on principles of natural justice.

In conclusion, the judgment addressed the issues of the validity of the show cause notice service and the applicability of Notification No. 230/77-C.E. The Tribunal upheld the validity of the notice service, rejecting the appellants' argument. However, it remanded the case to the adjudicating authority to consider the applicability of the notification and allow the appellants to present their case on merits. The decision emphasized the importance of procedural fairness and thorough consideration of legal provisions in excise duty matters.