ORDER
K. Gopal Hegde, Member (J)
1. The prayer in this application is for dispensation with the pre-deposit of Rs. 4,00,551.50 ps. the duty demanded and Rs. 1,00,000/- the penalty imposed on the applicants. Appearing for the applicants Shri Hidayuttallah firstly urged that the show cause notice in this case was issued by the Assistant Collector of Central Excise, Bombay-Ill on 10-2-1986. Prior to this date, certain amendments were carried out to Section 11 A. One of the amendment was that the show cause notice in respect of recovery of an amount which would fall within the proviso to Section 11A has to be issued by the Collector. Therefore, subsequent to 28-12-1985, on which date this amendment came into force, the Assistant Collector has no jurisdiction or power to issue the show cause notice in question. As this show cause notice itself was bad in law, the order passed in pursuance to such a show cause notice was also bad in law. On this ground alone the applicants are entitled to an unconditional stay. Shri Hidayuttallah further contended that at this stage itself the Bench should set aside the impugned order in appeal and in support of his contention he relied on the decision of the South Regional Bench reported in 1987 (9) E.T.R. 256 in the case of Mysore Prefabs and Prefabs India v. Collector of Central Excise, Bangalore. Shri Hidayuttallah further canvassed that there had been a denial of principles of natural justice inasmuch as the request of the applicants for cross-examination of the witnesses have been denied by the Collector, and therefore, the impugned order on that ground is vitiated. It was also urged by Shri Hidayuttallah that the department only counted the heads. They did not try to find out the workers actually employed in the manufacturing activities and therefore the mere presence of the number of workers by itself would not be sufficient to demand the duty. Shri Hidayuttallah further contended that the actual raid took place on 20-8-1985 after the Not. No. 46/81, had been rescinded on 1-8-1985. Having regard to the patent error of jurisdiction and violation of ptinciples of natural justice, Shri Hidayuttallah reiterated that the appeal itself should be allowed and an order similar to the order passed by the South Regional Bench should be passed.
2. Shri Pattekar appearing for the Collector while admitting that the Assistant Collector had no jurisdiction or power to issue show cause notice in question contended that this issue had not been taken before the Collector and if it had been taken, the Collector would have given reasons.
3. We have considered the submissions made on both the sides. We are unable to agree with the contention of Shri Hidayuttallah that at this stage we should dispose of the appeal by setting aside the impugned order. Admittedly, the appeal involves a question having a relation to the rate of duty which is under the purview of the Special Bench. To facilitate the traders the President has issued orders empowering the Regional Benches to hear the stay applications arising out of the matters which fall within the Special Bench jurisdiction. It is on account of the Presidential orders the stay applications which normally are required to be heard by the regular Special Benches are being heard by the Regional Special Benches. It is true, that Shri Hidayuttallah’s contentions find support in the orders of the South Regional Bench referred to above. The SRB is a co-ordinate Bench. Though we respect the judgment we are not bound by it. Having regard to the limited scope and power conferred on the Regional Special Benches we are not inclined to grant the relief sought by Shri Hidayuttallah as to the setting aside of the impugned order.
4. Undisputedly, from 28-12-1985 the power to issue show cause notices in respect of recoveries falling under the proviso to Section 11A vests with the Collector and the Collector alone. The power which the Central Excise Officers had upto that date been taken away. Thus, there is considerable force in the contention of Shri Hidayuttallah that the show cause notice itself is bad in law and therefore the order of the Collector in pursuance of such a show cause notice is also bad in law. On this ground along the applicants are entitled to the grant of an unconditional stay. Since we grant an unconditional stay on this ground itself we consider it unnecessary to go into the other contentions of Shri Hidayuttallah.
5. In the result we grant an unconditional stay both with regard to pre-deposit as well as recovery of the duty and penalty amounts.
6. Shri Hidayuttallah appearing for the applicants had brought to our notice that even though the stay application had been filed and pending before the Tribunal the Central Excise Officers have chosen to detain the goods as a result the functioning of the factory had stopped. If the applicant had brought to the notice of the Central Excise Officers regarding the pendency of, the stay application in fairness the Central Excise Officers should not have proceeded to detain the goods. The conduct appears reprehensible. This aspect would be noted by the department for their future guidance.