Per Shri T.P. Nambiar :

This is an appeal filed by the appellant against the orders passed by the Commissioner where the duty demand of Rs. 9,30,801/- is made and penalty of Rs. 20,000/- and Rs. 5,000/- are imposed on the appellants. The goods are confiscated. The appellant in his appeal has not challenged about the confiscation of the goods as well as the release thereof and the amount which was recovered. The only ground urged by the appellant in these appeals are with respect to the demand of duty without issuing a Show Cause Notice.

2. The learned advocate Shri R. Raghavan contended before us that under Section 11A before duty is confirmed a Show Cause Notice should be issued. In this connection, he drew our attention to the words of Section 11A and stated that the word "may" therein should be read as "Shall". He also stated that the various decisions of the Hon'ble Supreme Court, it is clearly stated that before a demand should be confirmed it should be preceded by a show cause notice. In this connection, he also drew our attention to rule 233A of the Central Excise Rules 1944 wherein it was stated that in the proceedings of confiscation and penalty the notice referred to in rule 233A (a) (b) may be oral. He also stated that the waiver is only for a written notice and not for the notice as such. He also pointed out that this also is only with respect to the confiscation as well as the penalty. He therefore pointed out that if section 11A and rule 233A are read together it becomes clear that notice is necessary before the duty is confirmed, whereas under rule 233A, a notice may be oral as far as confiscation and the penalty proceedings are concerned. In this case, he pointed out that letter of the appellants which is at page 34 of the paper book and which is written by Visu Pipes & Fittings Pvt. Ltd. is to the effect that they were depositing the duty of Rs. 6,30,801/- under protest. He therefore pointed out that they have not conceded with the duty payment. He further pointed out that the appellants also have clearly stated that an appealable order should be passed in this case which goes to show that their payment was under protest only and they wanted an order to be passed in this regard. Therefore, he pointed out that it cannot be said that there was any waiver with respect to this duty payment. He further pointed out that there cannot be any estoppel against the statute. In this connection, he relied on the decision of the tribunal reported in 1997 (20) RLT 64 in the case of Saphai Saw Mills & Veneer Unit Vs. CCE.

3. The learned SDR for the department Shri Rama Rao stated that in terms of letter dt. 19.6.95, they have waived both the personal hearing as well as the show cause notice. He pointed out that in the decision relied upon by the learned advocate, there was no waiver of the personal hearing. He further pointed out that in that case, there is no duty demand. Therefore, he distinguished the above said decision from the facts of this case. He further pointed out that the word "may" used in section 11A of the Act is very important. He stated that this word "may" is used in order to cover such cases wherein the assessees may waive the show cause notice or the personal hearing. Therefore, it was pointed out that when the appellants have waived the issue of show cause notice as well as the personal hearing which were turned down to say that they are prejudice in this above matter and more particularly in view of the wording of section 11A of the Central Excise Rules 1944.

4. We have considered the submissions of both the sides. In order to appreciate the rival arguments, we reproduce the letter dt. 19.6.95 which is at page 34 & 35 of the paper book which reads as under :-

We wish to state that we are manufacturing PVC Pipes following under Sub-heading 3917.00. On 19.1.95, the officers attached to the preventive group, Salem Division, have registered case against us and recovered certain registers and records from us.