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TMI Blog2017 (10) TMI 93X X X X Extracts X X X X X X X X Extracts X X X X ..... his probably the longest show cause notice assailed before this Court in writ jurisdiction. The said notice has been issued invoking Section 11A of the Central Excise Act, 1944 and Section 72 of the Customs Act, 1962. 2. Shorn of unnecessary details, the sum and substance of the said Show Cause Notice covering the period of 10 years from August 2004 to May 2014 is that on account of Revenue Intelligence Reports, the said Authority has reasons to call upon the petitioner, a Proprietary concern that it has not only violated the conditions of import of marble and granite from other countries free from payment of customs duty and then instead of re-exporting the finished products manufactured out of this marble and granite blocks, since it was a 100% Exported Oriented Unit (EOU) and since it diverted the finished goods through its sister concerns into the domestic market and therefore, it is not only liable to pay customs duty for such violations, but also such central excise duty with interest and penalty under the provisions of the Central Excise Act, 1944, as well as Customs Act, 1962. 3. Some portion of the said Show Cause Notice are quoted below to give a brief idea of the proce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in DTA. 25.1: It appears from the above, both DGCEI and Commissioner of Central Excise, cannot be adopted in the instant case, as new facts and evidences have emerged in light of the same the period covered is considerably wider. The present SCN proposes to cover the period from 2004-2014 whereas the SCNs issued by DGCEI and Central Excise were for a limited period as stated above and were in respect of undervaluation of permitted DTA clearances and clandestine removal for the period to April-June 2006. It could be seen that the value declared by M/s HMG for marble slabs cleared by them varies from Rs. 250 to Rs. 2500. It could also be seen that M/s HG have imported marble slabs at the rate of Rs. 303.16 per Sq. ft & Rs. 393.206 per Sq. ft during 2011-12 & 2013-14 respectively. As far as clearances of marble slabs fare concerned, it is to be noted that the values adopted in the present SCN based on fresh facts/evidence, invariably higher than the values adopted by the DGCEI/CCE for the relevant periods. Thus the present SCN covers the period from August 2004 to May 2014, which includes the period already covered in the SCNs issued by DGCEI and Commissioner of Central Excise. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed period by invoking the provisions of the Bond executed by M/s HG as a 100% EOU binding itself to make good/pay all duties on demand". 4. While issuing notice in the present writ petition, the coordinate bench of this Court vide order dated 03.12.2015 had stayed all further proceedings in pursuance of the said show cause notice Annexure-M and that interim order is still continuing and the Respondents have filed the Statement of Objections thereafter and today, the matter was heard finally at the admission stage which is listed in 'B' group category before this Court. 5. Mr.S.S.Naganand, learned Senior counsel for the petitioners has essentially raised the following contentions with great emphasis:- (i) that the impugned show cause notice ex-facie is illegal and without jurisdiction, as the same is clearly hit by the provisions of Section 11A of the Central Excise Act, 1944. in so far as the maximum limitation period prescribed under this provision is 5 years, even if such an action is taken by the Respondent Authority on the allegations of misrepresentation, misstatement, fraud or collusion by the assessee and therefore, there is no way that the Respondents-Authority can wrigg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd that the said allegations need to be looked into afresh and adjudicated upon for which only a show cause notice has been issued by the said Addl.Director General with a clear stipulation and direction to the petitioners to go before the 2nd Respondent-Authority who is competent to pass appropriate adjudication orders in the matter. (ii) He has emphatically submitted that the issues covered by the show-cause notice are not overlapping and they pertain to mainly the violations committed by the assessee, the illegal diversion of finished goods, which was imported under Customs law and then surreptitious removal of goods for domestic market evading excise duty and customs duty as well. (iii) As far as the adjudication orders already passed are concerned, the learned counsel for the Respondents-Department has submitted that such orders cannot come in the way of fresh adjudication on the basis of fresh material which has not only been indicated in the impugned show cause notice, but otherwise also the adverse material which is used against the petitioner-assessee would be supplied to the petitioner to meet the principles of natural justice, fairness and transparency in the assessmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red in DRI notices is covered only in two show cause notices and since even these two notices had not covered the issue of clandestine clearance (except for only 3 months covered by DGCEI) and the Central Excise & DGCEI authorities have issued notices mainly covering DTA Permitted clearances. In most of the notices issued by the Commissioner/DGCEI, the issue covered is Granite clearance in DTA by the petitioner. However, DTA clearance of Marble Slabs, which was obtained based on falsified export by the petitioner is only a small portion of the total demand made. The allegation in the notice is that the petitioner has not exported any goods and hence they are not eligible for any DTA clearance, for which they have obtained permission from authorities and cleared the same. Therefore, the facts of this case is entirely different. Further, the notice has also made provision or an inbuilt mechanism for taking note of the notices issued by the DGCEI and Commissioner of Central Excise and their decision/final outcome". 8. Having heard the learned counsels and upon perusal of the bulky record and dispassionate consideration of the rival contentions, this Court is of the view that the pres ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the Respondent Authorities concerned have tried to sit over the judgment of the previous authorities who passed adjudication orders, which the said authority cannot do, but the effect of the impugned proceedings on the already passed adjudication orders is inter- dependent and such an effect, though is not barred in law and the same can always be taken into account even by appellate authorities as and when such developments take place in the process of the present impugned adjudication proceedings. (vi) While the higher authorities at the Appellate forums can also take note of subsequent adjudication orders now to be passed, at the same time, the adjudicating authority can also take note of the appellate orders passed for the previous periods in the proceedings now pending before them. Such interdependence of facts and law cannot be shred and placed in water tight compartment period wise or year wise assessments of the assessee in the present case. (vii) This Court cannot lose sight of the allegations that the petitioners, a 100% EOU is alleged to have misused the very import of marble and granite blocks as exempted imports and by diverting the finished goods of such marble ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation at the front gate of such investigation at this stage. (xi) The period of investigation and assessment under the impugned show cause notice may be apparently fall 10 years from 2004-2014 and may be it is the 7th round of litigation by the 7th show cause notice as contended at bar by the learned Senior counsel for the petitioners, but this Court does not find such a show cause notice to be ex-facie illegal and without jurisdiction and to be quashed out of hand. (xii) Ultimately, it is the quest of truth and truth alone being the guiding star in the process of the judicial dispensation and that should be the touch stone for testing such challenges at the preliminary stages of the proceedings. (xiii) The case laws cited at bar turning on their own facts cannot be invoked and applied at this stage and this Court is not inclined to hold on the basis of such case laws that the impugned show cause notice will be rendered as patently without jurisdiction on that basis. 9. For these reasons, this Court does not find any good ground for interference in the Show Cause Notice at this stage. The present petitions are liable to be dismissed and accordingly they are dismissed. No costs. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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