PANKAJ ISPAT LIMITED Vs. UNION OF INDIA

JUDGEMENT

(1.) The petitioners have filed this writ petition calling in question the legality as well as the sustainability of the show cause notice dated 30-6-2014 issued by the Commissioner, Central Excise, to the petitioner as to why the central excise duty to the extent of Rs. 21,97,10,427/- should not be recovered from the petitioner under the proviso to Section 11A / sub-section (4) of Section 11A of the Central Excise Act, 1944 (for short, 'the Act of 1944') by invoking the extended period of five years and as to why the amount already deposited of Rs. 51,05,157/- be not appropriated against the said demand, and also for showing cause for recovering interest under Section 11AB/11AA of the Act of 1944 and as to why penalty under Section 11AC/sub-section 1(a) of Section 11AC of the Act of 1944 be not imposed upon the petitioners.

(2.) Petitioner No.1 is a Company engaged in manufacture of excisable goods such as MS Ingots and various Rolled Products like Angles, Channels, CDT Bars, MS TMT Bars and is said to have been regularly paying central excise duty in accordance with the Act of 1944 and the Central Excise Rules in respect of the aforesaid business. Petitioner No.2 is said to be the Director of the said Company.

(3.) The Commissioner, Central Excise, issued a show cause notice dated 30-6-2014 under the proviso to Section 11A / sub-section (4) of Section 11A of the Act of 1944 after conducting the search proceedings on 12-4-2014 which is to be received by the petitioners on 7-1-2015, for showing cause as to why the aforesaid amount be not recovered under the proviso to Section 11A / sub-section (4) of Section 11A of the Act of 1944. The said show cause notice has been questioned principally on the ground that the show cause notice has been issued beyond the limitation of one year as prescribed in Section 11 of the Act of 1944 by wrongly applying and invoking the extended period of limitation of five years with the aid of sub-section (4) of Section 11A of the Act of 1944 and a further ground has been taken, as the petitioners have deposited an amount of Rs. 51,05,157/- within few days of detecting the short fall, the case of the petitioners is covered under Sections 11A(5) and 11A(6) of the Act of 1944 and therefore as per sub-section (7) of Section 11A of the Act, the period of limitation available to the Department for issuing show cause notice was one year as such, the show cause notice as issued on 30-6-2014 is without any authority of law; and that the show cause notices issued to few other manufacturers / traders / transporters on the basis of documents recovered from the premises of the petitioners have already been dropped by the order of the competent authority and therefore applying the same analogy, the show cause notice issued to the petitioners is also liable to be dropped. Lastly, it has been pleaded that the show cause notice issued to the petitioners is issued with predetermined mind and the issue has been prejudged by recording a specific finding and no issue is left to be adjudicated after the show cause notice and therefore the show cause notice deserves to be quashed.