The Tribunal allowed both excise appeals of M/s Gahoi Tobacco Products Pvt. Ltd. and its ex‑Managing Director, setting aside the Commissioner’s de novo order on the ground of limitation and invalid service of show cause notice (SCN).
Facts and background
- The assessee is a gutka manufacturer registered with Central Excise; earlier seizures in 2007 led to a separate SCN dated 3.12.2007, which was remanded by CESTAT in 2018 and is not part of these appeals.
- The present matter arises from another SCN dated 11.4.2011 alleging clandestine removals for 1.4.2007–30.6.2007, based on statements and documents.
- The SCN was dispatched to the assessee’s old address despite the change of address having been intimated; it was returned by the postal department marked “left” and then merely affixed on the departmental notice board, after which the Commissioner passed the impugned order dated 26.09.2022 in de novo proceedings.
Service of SCN and limitation
- The assessee contended that:
- SCN copy was supplied only on 24.7.2012 (after the original order‑in‑original),
- Annexures to the SCN were supplied only on 16.7.2019, and
- Relied upon documents were supplied only on 29.12.2022; hence the “complete” SCN reached them only on 29.12.2022, well beyond even the extended 5‑year period from 30.6.2007.
- The Revenue argued that the assessee was “in possession” of the SCN through the contents reproduced in the impugned order‑in‑original.
- The Tribunal held that under section 11A of the Central Excise Act, 1944, duty demand must be made by serving an SCN within two years (normal) or within five years (extended, in cases of fraud, suppression, etc.), and no demand can be raised by serving an SCN beyond five years even where fraud etc. is alleged.
- It found:
- Service at the old address, followed only by affixture on the departmental notice board, did not amount to valid service, particularly when change of address had been intimated.
- Actual service of the SCN on 24.7.2012 and of annexures/relied‑upon documents even later was beyond the five‑year extended limitation from 30.6.2007.
- The plea that reproduction of allegations in the order‑in‑original could be treated as service of SCN was rejected; an SCN must be served before passing the order to give the noticee an opportunity to show cause.
Decision
- The Tribunal held that the SCN was clearly time‑barred and that the impugned order, being founded on such an SCN, could not be sustained.
- Without examining other merits, it set aside the Commissioner’s order and allowed both appeals with consequential relief to the appellants.
Download Final Order Click Here
For Other Legal Notes Click Here