GTC INDUSTRIES LTD. versus COLLECTOR OF CENTRAL EXCISE, NEW DELHI

Citation: [1997] SUPP. 3 S.C.R. 10 · Decided: 22-07-1997 · Supreme Court of India · Bench: S.P. BHARUCHA · Disposal: Appeal(s) allowed

Judgment (excerpt)

A 
B 
GTC INDUSTRIES LTD. 
v. 
COLLECTOR OF CENTRAL EXCISE, NEW DELHI 
JULY 22, 1997 
(S.P. BHARUCHA AND V.N. KHARE, JJ.] 
Central Excises and Salt Act, 1944: Sec. 35E(J)-Assessee-Cigarette 
manufacturing company-Def a ult in payment of excise du~ 
Two show cause 
notices issued-Subsequently third show cause notice issued-On chal-
C lenge-High Court permitting Revenue to proceed with adjudication-But 
directions issued for not communicating the orders-Subsequently sealed en-
velope opened and orders shows shown io parties-Appeal by Revenue against 
the adjudication order-Held, appeal filed by the Revenue before the Tribunal 
is beyond time-Cannot be entertained-Each show cause notice must be 
D limited to the case made out therein-No jurisdiction for Tribunal to direct 
that third show cause notice be looked into for the purpose of adjudication 
of 1st and 2nd show cause notices-Direction of tribunal-Beyond its ad-
judicatory.function. 
The appellant-assessee, a cigarette manufacturing Company, was 
E 
issued two show cause notices demanding excise duty. Subsequently a third 
show cause notice was issued to the assessee. A petition challenging the 
show cause notices was filed before the High Court. The High Court 011 
20th June 1984 while permitting the Revenue to proceed with adjudication 
of the first show cause notice directed not to communicate the order 
passed in the adjudication proceedings to the parties. By subsequent order 
F 
dt. 18th June 1991 High Court gave directions for opening the sealed cover 
and for showing the orders to the parties. A direction for filing appeal 
against the adjudication order was passed by the High Court on 21st July 
1994. The appeal filed by the assessee against the adjudication order on 
the ground that the Board's order had been passed beyond the period 
stipulated in Section 35E of the Central Excises and Salt Act, 1944 was 
G dismissed by the Customs, Excise and Gold (Control) Appellate Tribunal. 
Aggrieved by the order of the Tribunal, the appellant-assessee has 
filed the present appeal. 
The contention of the appellant-assessee was that the Board's, order, 
H directing that an appeal should be filed by the Revenue against the 
10 
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GTCINDUSTRIE.SLTD. v. C.C.E.,NEWDELHI 
11 
adjudication order, was passed after the expiry of the ~eriod specified in A 
that behalf. It was further contended that the Tribunal exceeded its juris· 
.J 
diction in ordering that the allegations contained in the third show cause 
notice shonld be looked into for the purpose of adjudication, on remand 
of the first and second show cause notices., 
The contention of the respondent was that the High Court directed B 
that the adjudication order should not be communicated to the assessee 
but should be kept in a sealed envelope. It was in consonance with the 
· J 
spirit of the order that the said assessment order had not been looked into 
by the Board under the provisions of section 35-E and therefore the period 
during which the said assessment order remained in a sealed envelope C 
should not be taken into consideration for filing an appeal. 
Allowing the appeals, this Court 
HELD: 1.1.The appeal filed by the Revenue before the Tribunal is D 
beyond time and it shall not be entertained. 
1.2. Section 35E(1) of the Central Excises and Salt Act, 1944 em-
powers 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 E 
itself as to the legality and propriety thereof. It can direct the Collector to 
apply to the Tribunal for determination of such points as arising out of 
the decision or order as are specified by the Board. Sub-section (3) of 
section 35-E 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 F 
adjudicating authority. The Board's order was well beyond the permitted 
time. [15-A-D] 
1.3. The High Court's order required the Revenue not to communi· 
cate the assessment order to the assessee. It imposed no restriction on the G 
activities of the Revenue. The examination of the assessment order by the 
Board under section 35-E 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. Therefore, the 
Board's order was passed af

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