The Bombay High Court while quashing the show cause-cum-demand notice held that the attempt to reopen an issue concluded by adjudicating authority is not permissible.
The petitioner, Supermax Personal Care Pvt. Ltd. is a company engaged in the business of manufacturing excisable goods, such as, safety razors, blades and shaving systems as well as cold rolled stainless steel strips falling under Chapters 82 and 72 of the Central Excise Tariff Act, 1985.
The notice to show cause-cum- demand was issued to the petitioner by the Commissioner of Central Goods and Services Tax (CGST) and Central Excise, Thane Commissionerate calling upon the petitioner to show-cause as to why central excise duty amounting to Rs.82,02,22,391 should not be demanded and recovered from the petitioner under section 11A(4) and section 11D(2) of the Central Excise Act being the duty payable for the period 2013-14 to 2017-18 (upto June 2017).
Interest as applicable on the amount of duty determined to be payable under section 11DD of the Central Excise Act; and as to why penalty under section 11AC of the Central Excise Act read with Rule 25 of the Central Excise Rules, 2002 should not be imposed.
It is asserted that central excise duty is once again sought to be demanded on the very same goods manufactured and cleared by Tigaksha which was the subject matter of dispute in the previous show cause-cum-demand notice.
Denying that petitioner has evaded central excise duty, it is submitted that provisions of sub section (4) of section 11A of the Central Excise Act have no application in the present case. The same is without jurisdiction and against the settled position of law. Allegations of the respondents that the petitioner has resorted to mis-representation has been denied.
Since the goods in question were manufactured by Tigaksha at Himachal Pradesh, it was beyond the jurisdiction of the Thane Commissionerate to demand central excise on such manufacture. Both the findings i.e. that the goods in question were manufactured by Tigaksha at Himachal Pradesh and that such manufacturing process was beyond the jurisdiction of Thane Commissionerate have not been challenged by the respondents and thus have attained finality.
As alluded to by the petitioner, Central Board of Excise and Customs has vested territorial jurisdiction upon various central excise officers vide Notification No.13/2017 dated 09.06.2017. From the said notification, it is evident that Commissioner of Central Excise, Shimla has territorial jurisdiction over the entire State of Himachal Pradesh. He in turn is under the administrative jurisdiction of Chief Commissioner, Chandigarh. On the other hand, Commissioner Thane who is under the administrative jurisdiction of Principal Chief Commissioner, Mumbai has territorial jurisdiction over the areas falling under the various pin-codes which are in the State of Maharashtra.
The division bench of Justice Ujjal Bhuyan and Milind N. Jadhav noted that the taxable event i.e. manufacture of the goods in question had taken place in the factory premises of Tigaksha at Una in Himachal Pradesh. Thus, neither respondent authorities has the territorial jurisdiction to issue any notice to show cause-cum-demand for levy of central excise duty on such products.
“We are of the opinion that the impugned show cause-cum-demand notice dated 26.05.2020 is clearly without jurisdiction and is an attempt to reopen an issue which was concluded by the adjudicating authority vide the order in original dated 20.11.2019 which is not permissible,” the court said.
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