TMI Blog1988 (5) TMI 38X X X X Extracts X X X X X X X X Extracts X X X X ..... esult is that the said show cause notice must be struck down in so far as period upto 6th February, 1984 is concerned, and can be regarded as a proper show cause notice only in respect of the subsequent period from 7th February, 1984 onwards. We are, therefore, of the view that under the said show cause notice the question of short-levy or non-levy of excise duty prior to 6th February, 1984 cannot be gone into by the Collector and the High Court was right in the view which it took. Appeal dismissed. - 1110 of 1986 - - - Dated:- 3-5-1988 - R.S. Pathak, C.J. and M.H. Kania, J. [Judgment per : Kania, J.]. - This is an appeal against the judgment of a Division Bench of the Madhya Pradesh High Court, Jabalpur (Indore Bench) in M. Petition No. 104 of 1984. The appeal is filed at the instance of the Union of India, Collector of Central Excise, Indore and two other excise officers. The respondents are the original petitioners in the aforesaid petition. We propose to refer to the parties by the description in the petition. 2. The facts necessary for the disposal of this appeal can be shortly stated. 3. The petitioner No. 1 is a Company manufacturing spun yarn. According to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ii) of Schedule 1 of the Central Excises Act. On 10th February, 1984 a notice was issued by the Superintendent, Central Excise on the petitioner No. 1 reciting inter alia that the Assistant Collector had modified the approval of the classification lists on 9th February, 1984 and calling upon the petitioner No. 1 to show cause why the duty short levied should not be recovered from them under the provisions of Section 11 A of the Central Excises Act. A second similar show cause notice was.also issued. The petitioner No. 1 wrote to the excise authorities pointing out that in view of the aforesaid writ petition filed by the appellant, the adjudication proceedings should be stayed till writ petition was disposed of. This request was turned down on 5th March, 1984 and orders of adjudication were passed by the Assistant Collector modifying the classification lists and confirming the demand made under the aforesaid notice of demand. The petitioners thereupon amended the aforesaid writ petition filed by them and challenged the two show cause notices as well as the said orders of adjudication, dated 5th March, 1984. The petitioners also filed an appeal before the Collector of Central Excises ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant portion of Section 11A of the Central Excises Act runs as follows :- "When any duty of excise has not been levied or paid or has been short-levied or short-paid or erroneously refunded, a Central Excise Officer may, within six months from the relevant date, serve notice on the person chargeable with the duty which has not been levied or paid or which has been short-levied 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 : Provided that where any duty of excise has not been levied or paid or has been short-levied or short-paid or erroneously refunded by reason of fraud, collusion or any wilful mis-statement or suppression of fact, or contravention of any of the provisions of this Act or of the rules made thereunder with intent to evade payment of duty, by such person or his agent, the provisions of this sub-section shall have effect, as if for the words "Central Excise Officer", the words "Collector of Central Excise" and for the words ''six months", the words "five years" were substituted." A perusal of the aforesaid provisions shows that before any demand is made on any p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ice of show cause has to be issued and sub-section (2) requires that the cause shown by way of representation has to be considered by the prescribed authority and then only the amount has to be determined. The scheme is in consonance with the rules of natural justice. An opportunity to be heard is intended to be afforded to the person who is likely to be prejudiced when the order is made before making the order. Notice is thus a condition precedent to a demand under subsection (2). 5. In view of the aforesaid decision the submission of Mr. Govind Das must be rejected and it must be held that the aforesaid notice of demand was clearly bad in law and the High Court was fully, with respect, justified in quashing the same. 6. The next submission of Mr. Govind Das was that, in any event, as the Collector of Central Excise (Appeals) had been directed to examine the merits of the matter in respect of alleged short-levy or non-levy and the modification of the classification lists after allowing adequate opportunity to the petitioners to show cause in respect of the period from 7th February, 1984, onwards, the question as to whether there was short-levy or non-levy in respect of the per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the short-levy and consequently, the amount which was liable to be recovered from the petitioner No. 1. This notice, therefore, cannot be regarded as a show cause notice against the modification of the classification lists in respect of the aforesaid period. Of these circumstances, the show cause notice is bad in law and of no legal effect as far as the said earlier period is concerned. Under Section 11A of the Central Excise Act, the notice can relate only to a period of six months prior to the issue of that notice except in cases where it is alleged the short-levy or short-payment has occurred by reason of fraud, collusion or wilful misrepresentation or suppression of facts or contravention of the provisions of the said Act or rules made by the period concerned, as contemplated in the proviso to sub-section (1) of Section 11A. No such case has been sought to be made here in the said show cause notice. The result is that the said show cause notice must be struck down in so far as period upto 6th February, 1984 is concerned, and can be regarded as a proper show cause notice only in respect of the subsequent period from 7th February, 1984 onwards. We are, therefore, of the view ..... X X X X Extracts X X X X X X X X Extracts X X X X
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