Bad SCNs and Adjudication Orders - CBEC Chairman wants Field to take note of SC Order
The Chairman of the CBEC in a letter to all Chief Commissioners and DGs , has invited their attention to the Supreme Court Judgement in Commissioner of Central Excise, Bangalore-III Vs. M/s. Shanmugananda Soapnut Works - 2008-TIOL-181-SC-CX. The Chairman extracted certain observations of the Supreme Court in his letter:-
(i) “Repeatedly this Court has observed that in cases in which excisability is in issue, the Department should insist on the examination of the product. Despite our saying so, repeatedly, the Department is not insisting on examining the process. This is one more such case.”
(ii) “………the show cause notice has not even alleged that the assessee is engaged in the manufacture of Shikakai powder by crushing shigekai pods and ‘ Reeta ' being mixed and, consequently, the entire adjudication stands derailed.”
(iii) “Lastly, in the present case, the adjudication authority has not insisted on examining the process undertaken by the assessee in conversion of the pods into powder.”
(iv) “Therefore, for want of allegations in the show cause notice and for want of specific findings with regard to use of Reeta in the powder, we do not wish to interfere on the facts of the present case.”
The Chairman further observed that the Apex Court has noted in the above judgement that “even in other cases despite its repeated directions the adjudication authority did not examine the process of manufacture. In the instant case, it has also pointed out that the Show Cause Notice does not mention the process of manufacture and therefore the entire adjudication stands derailed.”
The Chairman wanted the judgement of the Supreme Court to be brought to the notice of all Commissioners including Commissioners (Appeals), ADGs, and other concerned officers with a direction that observations made by the Apex Court are duly taken note of and complied with.