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Central Excise - Issue of show cause notice for raising demand at the
time of assessment of RT-12
Circular
No. 228
dated 8th July 1996
A
doubt has arisen on account of conflicting views taken by various Hon'ble High
Court and CEGAT on the issue whether a Demand -Cum-Show-Cause-Notice under
Section 11A of Central Excises & Salt Act, 1944 is required to be issued
once assessment of RT - 12 is finalised and the Superintendent of Central Excise
indicates in the assessment memorandum the amount of duty debited less by the
assessee. The ratio of judgements in the cases of M/s Rasoi Ltd.v.CCE-1993 (63)
ELT 512 (Tribunal), Swan Mills Ltd. v. Union of India - 1989 (44) ELT 601
(Bombay) and M/s Devangere Cotton Mills Ltd. v. Union of India (Karnataka) is
that no Show Cause Notice is required u/s 11A once the Assessment Order made
under Rule 173-I of Central Excise Rules, 1944 had become final.
2.
However, several conflicting decisions are available on this issue some
of which are as follows:
1.
CCE vs. Indian Iron & Steel Company 1989 (39) ELT 617 (Tribunal)
2.
Vipul Dyes Chemicals Pvt. Ltd. vs.CCE 1989 (44) ELT 724 (Tribunal)
3.
CCE Bombay-I vs. New Great Eastern Spg. & Wvg. Mills Ltd. 1995 (75)
ELT 613 (Tribunal)
4.
M/s Hira Cable Works v. CCE Bhubaneshwar (vide Order No. 567/96A dated
23.1.96 arising out of appeal No. E. 1471/ 95-A)
5.
CCE Bombay-II vs. Leo Parma (Vide Final Order) No 1020/96-A dated 6.3.96
arising out of appeal No. E. 2640/ 85A)
In
all the above judgements, in has been held that demand raised on RT-12 without
issue of show cause notice is not maintainable in the eye of law.
3.
In am directed to say that Board is examining the matter in consultation
with the Ministry of Law, Keeping in view the decisions taken by the Hon'ble
CEGAT, especially the latest decision dated 6.3.96, supra, it has been decided
that till the issue is resolved, necessary steps to safeguard the revenue should
be taken be immediately raising the Demand-Cum-
Show-Cause-Notifies and making endorsement of the Show Cause Notice number &
dated on the Assessment Memorandum of the RT-12 returns in which short
levy/short payments found on assessment.
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