Judgment:
1. The appellants are required to deposit Central Excise duty of Rs. 2,75,459.52 and penalty of Rs. 20.000/-. The period covered by the demand is 1981-82 and 1982-83. The show cause notice was issued some 3 years later, on 6-2-1986, by the Superintendent of Central Excise. The show cause notice was under Section 11 -A of the Central Excises & Salt Act, 1944, and it invoked the proviso to Sub-section (1) of Section 11-A which allowed the 5 years period for issue of the show cause notice where suppression of facts or fraud is alleged. After 28-12-1985, the amended Section 11 -A required that such show cause notices should be issued only by the Collector of Central Excise and not by an officer lower in rank than the Collector. In a case where such a show cause notice was issued by the Superintendent of Central Excise, the Hon'ble Gujarat High Court in their judgment at 1988 (34) ELT 442 (Guj.) - Gujarat State Fertilizer Co. Ltd. and Anr. v. Union of India and Ors., held that the show cause notice was In contravention of Sub-section (1) of Section 11-A of the Act and was illegal and quash-able. In view of this legal position, the appellants have a prima facie point in their favour on the legal ground.
2. Accordingly, we allow the Stay Application and order waiver of the condition of pre-deposit as well as stay of recovery of the demand for duty as well as penalty till the disposal of the appeal.
3. We also allow the 2 Miscellaneous Applications in which a prayer was made by the appellants for adding the aforesaid legal ground in the appeal and the Stay Application