TMI Blog1993 (2) TMI 107X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 11A of the Central Excises and Salt Act, 1944 (hereinafter called as 'the Act'). It reads thus: " WHEREAS it appears that M/s. Loharu Steel Industries, Devanahalli Road, Bangalore - 49, have wilfully contravened the provisions of Rules 9(1), 52A, 53 read with Rule 226, Rules 173B, 173F, 173G and 174 of Central Excise Rules, 1944 inasmuch as they have manufactured and cleared excisable goods viz. CTD bars twisted after hot rolling (popularly known as 'TOR STEEL' to Trade parlance) Weighing 14,796.490 Metric Tonnes classifiable under chapter sub-heading 7214.90 of the Central Excise Tariff Act, 1985, during the period from 1-3-1989 to 15-8-1989 as detailed in the Annexure-I enclosed to this notice, without obtaining a Central Excise Licence, without payment of Central Excise duty and without following Central Excise procedures and have suppressed the facts of production and clearance from the Department with an intention to evade payment of Central Excise duty. 2. M/s. Loharu Steel Industries, Bangalore, are therefore, required to show cause to the Collector of Central Excise, Central Revenue Building, Queen's Road, Bangalore-1 as to - (i) Why Central Excise duty amounting ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the case is adjudicated, failing which it will be presumed that the appellant does not desire any personal hearing. 6. The appellant has been directed to show cause within 30 days. Therefore it is clear from the show cause notice that no decision has been taken ex parte. The adjudication is yet to take place after the written statement is filed by the appellant and the evidence, if any, adduced by it and also after hearing the appellant if the appellant desires to be heard personally. Whether in such a situation exercise of jurisdiction under Article 226 of the Constitution is called for is a question for determination. 7. The Supreme Court in Geep Flashlight Industries Ltd. v. Union of India and Others [AIR 1977 S.C. 456 = 1983 (13) E.L.T. 1596 (S.C.)] was called upon to decide as to whether certiorari jurisdiction can be exercised against a show cause notice issued under Section 131(3) of the Customs Act as it stood. The Supreme Court, after considering the submissions made, held as follows: "22. Once the provisions contained in Section 131(3) are attracted the Central Government may of its own motion annul or modify any order passed under Section 128 or Section 130. This ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Court has held as follows: "3. In Titaghur Paper Mills Co, Ltd., v. State of Orissa (AIR 1983 S.C. 603), A.R Sen, E.S. Venkataramiah and R.B. Misra, JJ held that where the statute itself provided the petitioners with an efficacious alternative remedy by way of an appeal to the Prescribed Authority, a second appeal to the Tribunal and thereafter to have the case stated to the High Court, it was not for the High Court to exercise its extraordinary jurisdiction under Art. 226 of the Constitution ignoring as it were, the complete statutory machinery. That it has become necessary, even now, for us to repeat this admonition is indeed a matter of tragic concern to us. Art. 226 is not meant to short circuit or circumvent statutory procedures. It is only where statutory remedies are entirely ill-suited to meet the demands of extraordinary situations, as for instance where the very vires of the statute is in question or where private or public wrongs are so inextricably mixed up and the prevention of public injury and the vindication of public justice require it that recourse may be had to Art. 226 of the Constitution. But then the Court must have good and sufficient reason to by-pass th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... andya by his notice No. OC 2193/81 dated 13-10-1981 followed up show-cause notice No. OC 2741/81 dated 10-10-1981 and revised show-cause notice No, OC 27/82 dated 1-1-1982 called upon the petitioner therein to pay excise duty on 'acetic anhydride' manufactured and supplied to drug manufacturers as a drug intermediate taking the view that it was a chemical and its supply as a drug intermediate did not entitle it for an exemption from excise duty under the Notification dated 1st March 1978. A contention was raised that as only a show-cause notice was issued, it would be open to the petitioner to put forth its case before the authority who had issued the show cause notice and that authority would be bound to decide the same and that thereafter the petitioner can work out his remedy under the statute by way of appeal. In para 7 of the judgment, the learned Single Judge appears to have agreed with this contention; but nevertheless interfered with the show-cause notice. The relevant portion of the judgment is as follows : "7, What is challenged are show-cause notices and therefore, it is open to the petitioner to appear before the Superintendent and urge the very case pleaded before th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... apparent lack of jurisdiction not involving determination of facts and only depends upon interpretation of law, interference under Article 226 at the stage of show cause notice is justified. When a statute provides for making a representation against the show cause notice and hearing of the party to whom the show cause notice is issued and thereafter the decision has to be taken and that decision is subject to appeal and further appeals and when there is no apparent lack of jurisdiction or it is not a pure question of law, the exercise of jurisdiction would amount to bypassing statutory remedies. Therefore, we find it difficult to agree with the view expressed in Mysore Acetate and Chemical Company's case. We accordingly, overrule it. 10. The second decision is of a Division Bench in Alembic Glass Industries Limited v. Union of India and Others [1986 (24) E.L.T. 23 (Kar.)]. In this case, the validity of Section 4(4)(d)(i) of the Central Excises and Salt Act, 1944, was challenged. A show cause notice was issued in exercise of the power under Section 4(4)(d)(i) of the Act. Whenever the validity of the provision is challenged, this Court in exercise of its jurisdiction under Article ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e therefore, reject the preliminary objection urged by Shri Bhat and proceed to examine the merits." (Emphasis supplied) Therefore, we are of the view that the aforesaid decision cannot be cited as a precedent to support the proposition that even at the stage of show cause notice, the exercise of powers under Article 226 of the Constitution is called for without any limitation. 11. The third decision is by a learned single Judge in Victory Glass and Industries Ltd. v. Collector of Central Excise [1990 (47) E.L.T. 540 (Kar.)]. In that case, there was a search of the premises of the Company. On the basis of the material collected during search, the Collector quantified Excise Duty payable and then issued the show cause notice accompanied by demand to pay the excise duty in a sum of Rs. 51,51,656.96. The facts as stated in the judgment were as follows :- "The petitioner is a Company manufacturing glass bottles of various sizes in its factory situated in Bommasandra Industrial Estate near Bangalore. The petitioner is a licensee under the Central excise Act ('the Act'), for the manufacture of Glass and Glass products falling under Chapter 70 of the Central Excise Tariff Act, 1985 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lly provide thus : ' "11A. RECOVERY OF DUTIES NOT LEVIED OR NOT PAID OR SHORT-LEVIED OR SHORT PAID OR ERRONEOUSLY REFUNDED. - (1) 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 pot 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 facts, or contravention of any of the provisions of this Act or of the rules made thereunder, with an 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. Explanation. - Where the se ..... X X X X Extracts X X X X X X X X Extracts X X X X
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