The main legal point established in the judgment is that the completion of assessment proceedings is a prerequisite for the issuance of notice under Section 11-A of the Central Excise Act, 1944. The court emphasized the importance of final assessment before invoking Section 11-A and held that the impugned notices were illegal due to non-compliance with this requirement.

Judgment

S.B. SINHA, J. - Completion of an assessment proceeding whether is a sine qua non for issuance of notice under Section 11 - A of the Central Excise Act, 1944 (for short "the Act") is the question involved in this appeal which arises out of a judgment and order dated 18 - 6 - 2004 as modified by an order dated 2 - 7 - 2004.

2. M/s ITC Ltd., Respondent 1 herein manufactures cigarettes. It gets the work done also by way of job work through various factories. These factories inter alia belonged to M/s Master Tobacco Company situated at 36/40, Mahalaxmi Birdege Arcade, Mahalaxmi Road, Mumbai and M/s Crown Tobacco Co. situated at 9, St. John Baptist Road, Bandra, Mumbai. A provisional price list was issued by the Department for the period 1 - 3 - 1973 to 28 - 2 - 1983.

3. It appears that there existed a dispute as regards mode of valuation for the purpose of levy of excise duty. By a judgment and order dated 19 - 7 - 1995, . this Court opined that excise duty should be paid on the wholesale dealers price to their customers and not on the price of Respondent 1 to its wholesale dealers.

4. A show - cause notice was issued on 10 - 4 - 1986 as to why the respondent and its wholesale dealers, being related persons, the cost of corrugated fibre containers (CFCs) should not be added to the manufacturing cost. A show - cause notice was also issued on 10/11 - 8 - 1983 asking the respondent to show cause as to why differential duty of Rs 57,22,63,857.70 for the period from 1 - 7 - 1980 to 31 - 3 - 1982 shall not be directed to be paid. Another notice was issued on 8 - 10 - 1984 demanding the differential duty of Rs 43,53,137.70 for the period 1 - 4 - 1982 to 30 - 6 - 1983. One show - cause notice was furthermore issued on 13 - 4 - 1987 demanding Rs 34 crores claiming freight and administrative charges collected by the respondent herein to be added as additional consideration.

5. Indisputably, the issue between the parties as regards valuation of the, goods was decided in favour of the respondent by CEGAT by an order dated 18 - 3 - 1994.

6. By reason of the order dated 30 - 8 - 1996, the assessees contention that the show - cause notices issued prior to finalisation of the provisional assessment was invalid had been rejected by the adjudicating authority directing:

"(i) The contention of the notices that the show - cause under consideration is invalid on the ground that it has been issued prior to the finalisation of the provisional assessment is not sustainable in law or on facts and hence it is rejected.

(ii) The Assistant Commissioner of Central Excise concerned or any other officer who is competent to make final assessment in the case under the relevant provisions of the Central Excises and Salt Act read with the Rules made thereunder will finalise the pending provisional assessment in respect of each of the three notices as per law for the period covered in the show - cause notice involved in the present proceedings. The said competent authority while finalising the provisional assessment as aforesaid is entitled and at liberty to proceed with any enquiry for the purpose of making final assessment in this case. Nothing prevents the said competent authority for the purpose of making the final assessment from utilising any material collected by the Department and that such material does not cease to be available to the said competent authority by reason alone of the circumstances that such material had been referred to and incorporated in the show - cause notice involved in the present proceedings. The material contained in the said notice can be used as independent material to support final assessment, after affording an opportunity to the notices concerned to meet the case and after considering the cause shown. The finalisation of provisional assessment as aforesaid should be completed as expeditiously as possible.

(iii) The said competent authority is further directed to intimate the adjudicating authority (CCE, Delhi) as soon a