Show cause notices issued under the Central Excise Act, 1944, are invalid if based on non-statutory norms and issued beyond the limitation period prescribed by Section 11A(11).

JUDGMENT :

HARISANKAR V. MENON, J.

1. These three writ petitions essentially seek to challenge the show cause notices issued by the Assessing Authority under the Central Excise Act, 1944 (for short the ‘Act’) on the ground of limitation.

2. The short facts as culled out from W.P. (C) No. 16115 of 2019 are as under:

The petitioner is stated to be engaged in the manufacture of MS/TMT Bars and Rods, out of MS Ingots. It is on the final products like MS/TMT Rods and Bars that excise duty is exigible. They contend that Ext.P1 show cause notice dated 28.04.2015 was issued by the 1st respondent noticing the consumption of raw materials during the years 2010-11 onwards and the actual production carried out. The notice states, with reference to the raw materials used and the actual production, that the output was only 91.74% of the raw materials. It further states that as per the norms fixed by M/s. Steel Authority of India Ltd. (for short, ‘SAIL’) the output should be 95%. With reference to the afore, the notice states that there was a short production of 6698.703 MT and the said quantity ought to be assessed to duty. The petitioner states that it submitted Ext.P2 reply to the 1st respondent herein seeking a copy of the audit report of CERA, referred to in the show cause notice, a copy of input/output norms fixed by SAIL, copy of the statutory authority which adopts the norms fixed by SAIL to be observed by companies like the petitioner. Ext.P3 is stated to be issued thereafter for the period from December 2014 to October 2015 on the very same basis. Though the petitioner states that it sent various communications seeking the documents already sought, Ext.P9 notice was issued for the period from November 2015 to June 2017, repeating the same allegations. It is stated that the petitioners are served with Ext.P14 letter dated 06.06.2019 from the 3rd respondent herein enclosing the copy of the tender instructions of SAIL as the evidence for the input-output norms as also the observation of CERA.

3. It is in the afore circumstances that the captioned writ petition is filed challenging Exts.P1, P3 and P9 notices on the ground that they are time-barred under Section 11A(11) of the Act, apart from contending that the very basis of the initiation of adjudication steps was flawed.

4. W.P. (C) No. 11633 of 2019 and 11717 of 2019 are filed by another company engaged in the manufacture of Pneumatic Tyres challenging show cause notices issued during 2009 and 2012, respectively, on the ground of limitation under Section 11A (11) of the Act.

5. I have heard Sri. Aravind P. Datar, the learned senior counsel instructed by Sri. Sajeev Kumar the learned counsel for the petitioner in W.P. (C) No. 16115 of 2019 and Sri. Joseph Kodianthara, the learned senior counsel for the petitioner in the other two cases. I have also heard Sri. Sreelal N. Warrier, the learned counsel for the respondents in W.P. (C) Nos.11717 and 11633 of 2019 and Sri. P.R.Sreejith, the learned counsel for the respondents in W.P. (C) No. 16115 of 2019.

6. Sri. Datar, the learned senior counsel, would contend that:

(i) The show cause notices were issued against the petitioner solely on the basis of the audit of the petitioner's records by CERA, which in turn relied on some “norms” fixed by the SAIL. The afore details were not provided to the petitioner originally, and it is only pursuant to Ext.P14 dated 06.06.2019 that they have been served on the petitioner.

(ii) The details so served in 2019, cannot be the basis for assuming jurisdiction over the petitioner under the provisions of the Central Excise Act.

(iii) Unless and until the statutory basis for the adoption of the so-called norms fixed by SAIL is made known by the respondent, no adjudication is possible against the petitioner.

(iv) He relied on the provisions of Section 3A of the Act to contend that the insistence of a particular output to be maintained by the manufacturer can only be with reference to the afore provision and no adjudicatio