Case: Gtc Industries Ltd Vs. Collector Of Central Excise, New Delhi

on which the sealed envelope had been opened pursuant to the High Courts direction and the said adjudication order shown to Counsel for the parties. The contention that the Boards order had been passed beyond the period stipulated in Section 35E was, therefore, negatived. The Tribunal referred to the application made to it by the Commissioner (L & A), New Delhi and accepted his case that he came to know of the Boards order only on or immediately after 7th December, 1995. Accordingly, it held that the Revenues appeal against the said adjudication order was in time. The Tribunal then noted the contention of the assessee that the assessment order had traversed beyond the scope of the grounds contained in the first and second show cause notices. The Tribunal saw no reason why the details regarding extra profit margin submitted in the third show cause notice should not be looked into for the purpose of the first and second show cause notices. It held that ?the allegations contained in the third show cause notice which are relevant and apposite to the period covered by first and second show cause notices can be looked into for the purpose of adjudication.? 9. It is submitted on behalf of the assessee that the Boards order, directing that an appeal should be filed by the Revenue against the said adjudication order, was passed after the expiry of the period specified in that behalf. Secondly, that, in any event, the filing of the Revenues appeal was beyond time. Thirdly, that the Tribunal exceeded its jurisdiction in ordering that the allegations contained in the third show cause notice should be looked into for the purpose of adjudication, on remand, of the first and second show cause notices. 10. Section 35E(1) empowers the Board to call for and examine the record of any proceeding in which the Collector of Central Excise, as an Adjudicating Authority, has passed any decision or order under the Act for the purpose of satisfying itself as to the legality and propriety thereof. It can direct the Collector to apply to the Tribunal for determination of such points as arise out of the decision or order as are specified by the Board. Sub-section (3) of Section 35L requires that no order shall be made under Sub-section (1) after the expiry of one year from the date of the decision or order of the Adjudicating Authority. 11. The said adjudication order was made on 21st August, 1987. The Boards order was made on 29th May, 1992. Prima facie, the Boards order was well beyond the permitted time. The learned Additional Solicitor General, appearing for the Revenue, relied upon the order of the High Court dated 20th June, 1984 which required that the adjudication order should not be communicated to the assessee but should be kept in a sealed envelope. He submitted that it was in consonance with the spirit of the order of the High Court that the said assessment order had not been looked at by the Board under the provisions of Section 35E and that, therefore, the period during which the said assessment order remained in a sealed envelope should not be taken into consideration; in other words, that the said assessment order should be deemed to bear the date on which it was removed from the sealed envelope, i.e. 18th June, 1991, from which date the appeal was in time. 12. The High Courts order dated 20th June, 1984 required the Revenue not to communicate to the assessee the said assessment order. It imposed no restriction on the activities of the Revenue. That this is so is borne out by the terms of the subsequent order of the High Court dated 18th June, 1991 in which the Revenue was directed to supply copies of the said assessment order to the assessees Advocates. The examination of the said assessment order by the Board under Section 35E of the Act was in no way inhibited by any order of the High Court; nor was the passing of an order directed to the assessing Authority consequent upon such examination. We, therefore, hold that the Boards order was passed after the period prescribed in that behalf by Section 35E of the Act. 13. This brings us to the application for clarification/direction made by the Commissioner (L & A), Customs and Central Excise, New Delhi to the Tribunal on 13th December, 1995. It stated, as aforesaid, that the Revenues appeal should be entertained because the Commissioner (L & A), Customs and Central Excise, New Delhi had not been endorsed a copy of the Boards order and that he had been informed thereof only on 7th December, 1995. The Boards order was endorsed to the Principal Collector, Central Excise, New Delhi. The third show cause notice, in respect of which the Revenue filed the appeal before the Tribunal, was issued by an officer in the Central Excise Collectorate at New Delhi. The requirement of Section 35E that the communication of the Boards order should be made was satisfied long before 7th December, 1995. Consequently, the Revenues appeal was filed long after the permissible period of three months. 14. It is to be noted that the High Court, by its order dated 21st July, 1994, permitted the assessee and the Revenue to file appeals against the said adjudication order within two months, but the Revenue did not take advantage thereof and filed its appeal only on 13th December, 1994. 15. The Tribunal found no legal difficulty in holding that the allegations contained in the third show cause notice should be looked into for the purpose of adjudication of the first and second show cause notices. We find great difficulty in upholding the Tribunals view. As we see it, each show cause notice must be limited to the case that is made out therein by the Revenue. It is not within the jurisdiction of the Tribunal to direct otherwise; to do is to go beyond its purely adjudicatory function.

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]10. Section 35E(1) empowers the Board to call for and examine the record of any proceeding in which the Collector of Central Excise, as an Adjudicating Authority, has passed any decision or order under the Act for the purpose of satisfying itself as to the legality and propriety thereof. It can direct the Collector to apply to the Tribunal for determination of such points as arise out of the decision or order as are specified by the Board. Sub-section (3) of Section 35L requires that no order shall be made under Sub-section (1) after the expiry of one year from the date of the decision or order of the Adjudicating AuthorityThe examination of the said assessment order by the Board under Section 35E of the Act was in no way inhibited by any order of the High Court; nor was the passing of an order directed to the assessing Authority consequent upon such examination. We, therefore, hold that the Boards order was passed after the period prescribed in that behalf by Section 35E of the Act14. It is to be noted that the High Court, by its order dated 21st July, 1994, permitted the assessee and the Revenue to file appeals against the said adjudication order within two months, but the Revenue did not take advantage thereof and filed its appeal only on 13th December, 199415. The Tribunal found no legal difficulty in holding that the allegations contained in the third show cause notice should be looked into for the purpose of adjudication of the first and second show cause notices. We find great difficulty in upholding the Tribunals view. As we see it, each show cause notice must be limited to the case that is made out therein by the Revenue. It is not within the jurisdiction of the Tribunal to direct otherwise; to do is to go beyond its purely adjudicatory function