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TMI Blog2019 (11) TMI 673X X X X Extracts X X X X X X X X Extracts X X X X ..... missionerate on the basis that the Respondent manufactured Foots Oil, Pressed Wax, Pressed Paraffin Wax without observing the mandatory procedure and clearing Excise Duty. Soon thereafter, Writ Petition No. 2073 of 2005 was filed by the Respondent before the High Court High Court of Judicature at Calcutta submitting inter alia that the Assistant Commissioner of Central Excise had no authority to proceed in the matter as no manufacturing activity was undertaken by the Respondent. The High Court by Order dated 28.11.2005 directed as under:- "Having heard the Learned Advocates appearing for the parties and considering the facts and circumstances of the case, I dispose of this petition by directing the respondent No.1 to decide the preliminary objection raised on behalf of the petitioners regarding the jurisdiction of the respondents to proceed in the matter under Central Excise Act before deciding any other issues in this matter on merit. Since no affidavit in opposition has been used on behalf of the respondents, all allegations levelled against the said respondents in this writ petition should not be deemed to be admitted." b) On 21.03.2006 a Show Cause Notice was issued by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... J.) directing the respondent, Commissioner of Central Excise, Anti-Evasion Unit to decide the preliminary objection raised by the petitioners regarding jurisdiction of the respondents to proceed against the petitioners under the Central Excise Act, 1944, he said respondent had not done so. It was alleged that the Show Cause Notice had been issued without deciding the preliminary objection of the petitioner. Mr. Tarafdar has produced the records pertaining to the case. It appears that the preliminary objection of the petitioners was decided by an order dated 15th March, 2006. A copy of the said order shall immediately be furnished to the petitioner and in any case within a week from date. ... ... ... The petitioners shall submit their reply to the Show Cause Notice impugned within four weeks from date. It will be open to the petitioners to take objection to the jurisdiction of the concerned Respondents to proceed against the petitioner under the Central Excise Act, 1944. The adjudication proceedings shall be conducted strictly in accordance with law and in compliance with principles of natural justice. The writ application is disposed of accordingly." d) Consequently, a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e in the process. ... ... ... 15. In the present case, we find that the imported Slack Wax, Residue Wax is in semi-solid form in drums. Foots Oil is part of Residue Wax or Slack Wax being lighter comes up on surface and siphoned by tilting the drums. The thinner Slack Wax called Foots Oil is thus separated. The pressure created by liquid through orifice for the purpose of exit is known as the hydraulic pressure. Basically, processed materials are emerging from the imported materials and the Revenue classified the processed material under the same Tariff Heading & CTH. The Hon'ble Supreme Court and the Tribunal in various decisions held that such process cannot be treated as manufacture under Section 2(f) of the Central Excise Act, 1944. Thus, we find force in the findings of the ld. Commissioner (Appeals)." 3. We heard Ms. Nisha Bagchi, learned Advocate, in support of this Appeal and Ms. Christi Jain, learned Advocate, for the Respondent. Ms. Bagchi, learned Advocate submitted that the process of adjudication had never taken place in the matter; there was no response to the Show Cause Notice; nothing was submitted by the Respondent denying or disputing the assertions made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vied or short-paid or erroneously refunded.- (1) Where any duty of excise has not been levied or paid or has been short-levied or short-paid or erroneously refunded, for any reason, other than the reason of fraud or collusion or any wilful misstatement or suppression of facts or contravention of any of the provisions of this Act or of the rules made thereunder with intent to evade payment of duty,- (a) the Central Excise Officer shall, within one year from the relevant date, serve notice on the person chargeable with the duty which has not been so levied or paid or which has been so shortlevied or short-paid or to whom the refund has erroneously been made, requiring him to show cause why he should not pay the amount specified in the notice; (b) the person chargeable with duty may, before service of notice under clause (a), pay on the basis of,- (i) his own ascertainment of such duty; or (ii)the duty ascertained by the Central Excise Officer the amount of duty along with interest payable thereon under section 11AA. (2) The person who has paid the duty under clause (b) of sub-section (1), shall inform the Central Excise Officer of such payment in writing, who, on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in clause (a) of sub-section (1) or five years referred to in sub-section (4), as the case may be. (9) Where any appellate authority or Tribunal or court concludes that the notice issued under sub-section (4) is not sustainable for the reason that the charges of fraud or collusion or any wilful mis-statement or suppression of facts or contravention of any of the provisions of this Act or of the rules made thereunder with intent to evade payment of duty has not been established against the person to whom the notice was issued, the Central Excise Officer shall determine the duty of excise payable by such person for the period of one year, deeming as if the notice were issued under clause (a) of sub-section (1). (10) The Central Excise Officer shall, after allowing the concerned person an opportunity of being heard, and after considering the representation, if any, made by such person, determine the amount of duty of excise due from such person not being in excess of the amount specified in the notice. (11) The Central Excise Officer shall determine the amount of duty of excise under sub-section (10)- (a) within six months from the date of notice in respect of cases fallin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id and the return has been filed, the date on which such return has been filed; (iii) in any other case, the date on which duty of excise is required to be paid under this Act or the rules made thereunder; (iv) in a case where duty of excise is provisionally assessed under this Act or the rules made thereunder, the date of adjustment of duty after the final assessment thereof; (v) in the case of excisable goods on which duty of excise has been erroneously refunded, the date of such refund; (vi) in the case where only interest is to be recovered, the date of payment of duty to which such interest relates. (c) Omitted. Explanation 2:- For the removal of doubts, it is hereby declared that any non-levy, short levy, nonpayment, short-payment or erroneous refund where no show cause notice has been issued before the date on which the Finance Bill, 2015 receives the assent of the President, shall be governed by the provisions of section 11A as amended by the Finance Act, 2015." 5. Section 11A thus deals with various facets including non-levy and non-payment of excise duty and contemplates issuance of a show cause notice by the Central Excise Officer requiring the "perso ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al determination under sub-section 10 of Section 11A is to be arrived at. 8. The issuance of show cause notice under Section 11A also has some significance in the eyes of law. The day the show cause notice is issued, becomes the reckoning date for various issues including the issue of limitation. If we accept the submission of the respondent that a prima facie view entertained by the department whether the matter requires to be proceeded with or not is to be taken as a decision or determination, it will create an imbalance in the working of various provisions of Section 11A of the Act including periods of limitation. It will be difficult to reckon as to from which date the limitation has to be counted. 9. In the present case, the respondent had not registered itself and was not paying any excise duty on the products that it was manufacturing. The search conducted by the Department at the registered office and the factory premises of the respondent led to the recovery of certain material on the basis of which the Department was considering the matter. At that stage, a writ petition was filed in which an order was passed by the High Court on 28.11.2005 directing the appellant to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Department is only a prima facie view, on the basis of which the show cause notice is issued. The determination comes only after a response or representation is preferred by the person to whom the show cause notice is addressed. As a part of his response, the concerned person may present his view point on all possible issues and only thereafter the determination or decision is arrived at. In the present case even before the response could be made by the respondent and the determination could be arrived at, the matter was carried in appeal against said Internal Order. The appellant was therefore, justified in submitting that the appeal itself was pre-mature. 12. It has been laid down by this Court that the excise law is a complete code in itself and it would normally not be appropriate for a Writ Court to entertain a petition under Article 226 of the Constitution and that the concerned person must first raise all the objections before the authority who had issued a show cause notice and the redressal in terms of the existing provisions of the law could be taken resort to if an adverse order was passed against such person. For example in Union of India and another vs. Guwahati Carb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se of Reliance Industries Ltd.3 was also in a completely different context. The order of the Collector dated 03.03.1986 which was subject matter of appeal in that case, was a record of a personal hearing in the course of the adjudication proceeding that was communicated to the assessee. It was therefore concluded that an appeal against such order would be maintainable. The point of distinction is that it was communicated by the Department during the course of adjudication proceedings whereas in the present matter there was no such communication by the Department on its own and the order dated 19.03.2016 was not a part of any adjudication proceedings. The proceedings would have begun only after the issuance of show cause notice under Section 11A of the Act. 14. We must at this stage refer to an aspect which was projected after the judgment was reserved in the matter. By filing an application for directions, attention of the Court was invited to Circular dated 22.08.2019 issued by Ministry of Finance, Department of Revenue, Central Board of Indirect Taxes and Customs (Judicial Cell), the relevant portion of which is to the following effect:- "In exercise of the powers conferred ..... X X X X Extracts X X X X X X X X Extracts X X X X
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