IFTIKHAR MUHAMMAD CHAUDHRY, C.J.---These petitions have been filed for leave to appeal against the judgment, dated 7-3-2005. It is to be noted that matter relates to alleged evasion of excise duty falling within the mischief of Rule 10 of Central Excise Rules, 1944. The Department issued show-cause notices to the petitioners calling upon them to show as to why proposed action for non-payment of the central excise duty, be not taken. Case-wise detail of the same is reproduced herein below from the chart which has been submitted under the direction of the Court by the learned counsel for the petitioners:--- Sr.
No,Case and TidePeriod of evasion of dutyDate/Show- Cause NoticeNature of allegation mentioned in the show-cause notice and the relevant sub-rule attracted to the Facts of the case.
1. 813-L/05 Collector C.E. and Sales Tax v. Messrs Pattoki Sugar.January, 1999 to March, 199914-10-2000 In Para.2 (at Page No.36 of the Paper Book) of the Show Cause Notice, the reasoning of alleged `wilfulevasion of Central Excise Duty has been adequately provided. The combined effect and import of Ist Proviso to Rule 12, Rule 13(1) and S.R.O. 547(I)/96, dated 1-6-1996 has been explained.
Moreover, inpara 4 of the show-cause notice, sub-rule 3 of the Rule 10 was added by the Adjudicating Authority under his own hand.
2. 814/L/2005 CollectorFebruary, 1998 to May, 199814-10-2000,In Para-2 (at Page No.37 of the Paper C.E. and Sales Tax v. Messrs Fauji SugarMay, 1998 Book) of the show-cause notice, the reasoning of alleged evasion of Central Excise Duty has been adequately provided. The combined effect and import of 1proviso to Rule 12, Rule 13(1) and S.R.O. 547(1)/96, dated 1-6-1996 has been explained.
3. 815-L/2005 Collector C.E. & Sales Tax v. Messrs Haseeb Waqas Sugar-April, 1998. 14-10-2000 In Para-2 (at Page No.37 of the Paper Book) of the show- cause notice, the reasoning of alleged evasion of Central Excise Duty has been adequately provided. The combined effect and import of 1Proviso to Rule 12, Rule 13(1) and S.R.O. 547(1)/96, dated 1-6-1996 has been explained.
4. 816-L/2005 Collector C.E. & Sales Tax b. Messrs Haseeb Wagas SugarJuly, 1998 to May, 199910-4-2000 In para. 2 (at Page No.36 of the Paper Book) of the show- cause notice, the reasoning of alleged `wilfulevasion of Central Excise Duty has been adequately provided. The combined effect and import of Ist proviso to Rule 12,rule 13(1) and S.R.O. 547(I)/96, dated 1-6-1996 has been explained.
5. 817-L/2005 Collector C.E. & Sales Tax v. Messrs Brother SugarSeptember, 1998 to December, 199814-10-2000 In Para-2 (at Page No.37 of the Paper Book) of the show-cause notice, the reasoning of alleged evasion of Central Excise Duty has been adequately provided. The combined effect and import of 1proviso to Rule 12, Rule 13(1) and S.R.O. 547(1)/96, dated 1- -1996 has been explained.
6. 818-L/2005 Collector C.E. & Sales Tax v. Messrs Brother SugarSeptember 1998 to February, 199930-8-2000 In Para-2 (at Page No.37 of the Paper Book) of the show-cause notice, the reasoning of alleged `wilfulevasion of Central Excise Duty has been adequately provided. The combined effect and import of Ist proviso to Rule 12, Rule3(1) and S.R.O.st st st 547(I)/96, dated 1-6-1996 has bian explained.
7. 819-L/2005 Collector C.E. & Sales Tax v. Messrs Abdullah SugarSeptember 1998 to December, 199829-6-2000 In Para-2 (at Page No.35 of the Paper Book) of the show-cause notice, the reasoning of alleged evasion of Central Excise Duty has been adequately provided. The combined effect and import of Ist proviso to Rule 12, Rule 13(1)and S.R.O. 547(1)/96, dated 1-6-1996 has been explained.
8. 820- L/2005 Collector C.E. and Sales Tax v. Messrs Abdullah SugarJuly, 1998 to April, 1999 14-10-2000In Para-2 (at Page No.37 of the Paper Book) of the Show Cause Notice, the reasoning `wilfulevasion of Central Excise Duty has been adequately provided. The combined effect and import of Ist proviso to Rule 12, Rule 13(1) and S.R.O. 547(I)/96, dated 1-6- 1996 has been explained. Moreover, in para. 4 of the show- cause notice, sub-rule 3 of the Rule 10 was added by the Adjudicating Authority under his own hand.
9. 835- L/2005 Collector.
C.E. and Sales Tax v. Messrs Baba Farid SugarDecember, 1998 to March, 199914-10-2000 In Para-2 (at Page No.36 of the Paper Book) of the Show-Cause Notice, the reasoning of alleged `wilfulevasion of Central Excise Duty has been adequately provided. The combined effect and import of Ist proviso to Rule 12, Rule 13(1) and S.R.O. 547(1)/96, dated 1-6-1996 has been explained.
2. Learned High Court by having relied mainly upon the judgment of this Court in the case of Assistant Collector Customs and others v. Messrs Khyber Electric Lamps and others (2001 SCM R 838), declared that show-cause notices served upon the respondents by the petitioner were patently illegal and beyond the period of limitation. Learned counsel for the petitioner, inter alia, contended that;
(i) The show-cause notice in substance contains the details in respect of violation of the provision of Rules 10, 12,
13. And S.R.O. 547(1)196, dated 1-6-1996, therefore, according to him non-mentioning in the notices subsequent provision of the rule is not fatal.
(ii) The question for determination before Adjudicating Authority as well as the High Court was as to whether excise duty has been evaded. According to him the show-cause notice contains sufficient material to hold that the respondents have evaded the duty and are liable for action under rule 10(2) of the Central Excise Rules, 1944.
(iii) The judgment which has been relied upon is distinguishable on the facts of the case.
3. On the other hand learned counsel appearing for the respondent vehemently opposed the petition and stated;
(a) Learned High Court had rightly applied the principle laid down by this Court in Khyber Electric Lampscase (ibid). As according to them the provision of section 32 of the Customs Act, 1969 is similar to that of Rule 10 of the Central Excise Rules, 1944, therefore, the show-cause notices issued by the department were rightly found illegal and beyond the limitation.
(b) After announcement of judgment in the case of Khyber Electric Lampscase (ibid) no ambiguity is left to determine as to whether under which clause of Rule 10 the case of the Department will fall but as there was no specific allegation in respect of evasion falling under sub-rule (1) of rule 10 of the Central Excise Rules, 1944, therefore, the High Court had rightly held that these notices were beyond the limitation as sub-rules (1), (2) and (3) of rule 10, have provided different periods of limitation for the purpose of re-opening of the case and unless the case is covered any specific allegation no action can be taken.
(c) Department had 'knowledge about the export of sugar by the respondents but no action was taken knowing well that there is no violation of any of the provision but subsequently vague.
Notices were issued with a view to cover limitation, therefore, High Court had rightly granted relief to the respondents.
4. After hearing the learned counsel for the parties at considerable length and having gone through the relevant provisions of law, Rule 10 of Central Excise Rule, 1944, section 32 of the Customs Act, 1969 and ratio in the case of Khyber Electric Lamps as well as the judgment A pronounced by this Court in case of Collector of Sales Tax and CE Lahore v. Zamindara Paper and Board Mills etc. (C.P. No, 702-L of 2003) leave to appeal is granted, inter alia, to examine the contentions put forward by the learned counsel for the parties.
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