Circular No. 228/62/96-CX dated 8/7/96
A doubt has arisen on account of conflicting views taken by various Hon"ble
High Courts and CEGAT on the issue whether a Demand-Cum-Show-Cause-Notice under
section IIA 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 judgementsin the cases ofM/s Rasoi Ltd. v. CCE - 1993 (63)ELT512 (Tribunal), Swan
Mills Ltd. v. Union of India - 1989 (44) ELT601 (Bombay) and M/s Devangere Cotton
Mills Ltd. v. Union of India (Kamataka) is that no Show Cause Notice is required u/s
IIA once the Assessment Order made under Rule 173-1 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 v. Indian Iron & Steel Company 1989 (39) ELT 617 (Tribunal)
2. Vipul Dyes Chemicals Pvt. Ltd.v. CCE 1989 (44) ELT 724 (Tribunal)
3. CCE v. Bombay-1 v. 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.147l/95-A)
5. CCE Bombay-11 v. Leo Pharma (Vide Final Order) No.l020/96-A dated 6.3.96
arising out of appeal No.E.2640/85A)
In all the abovejudgements, ithas been held that dc-rnand raised on RT-12
without issue of show cause notice is ftot maintainable in the eye of law.
3. I 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 by immediately
raising the Demand- Cum-Show-Cause-Notice and making endorsement of the Show Cause
Notice number & date on the Assessment Memorandum of the RT-12 returns in which
short levy/shortpaymehtis found on assessment.
Sd/-
(P.K.Sinha)
Under Secretary (CX.6)
F.No.202/5/96-CX.6Presented by eximkey.com