2021 (5) TMI 771 - HC - Central Excise

Show cause notices quashed due to unreasonable delays, emphasizing statutory time limits.

The court quashed show cause notices issued over a decade ago due to prolonged non-adjudication, emphasizing adherence to statutory time limits. It found ... Delay in conclusion of adjudication - Recovery of dues - recovery of deficit in payment of excise duty etc. on the ground of 11 years' delay in adjudication till now - HELD THAT:- Similar issue was considered by Gujarat High Court in SIDDHI VINAYAK SYNTEX PVT LTD. VERSUS VERSUS UNION OF INDIA & 2 [2017 (3) TMI 1534 - GUJARAT HIGH COURT]. Judgments of different High Courts were referred to and it was summed up that delay in conclusion of proceedings pursuant to show cause notices after a long gap without proper explanation, is unlawful and arbitrary. The Court further examined the fact as to whether transfer of proceedings to call book in view of circular dated 14.12.1995 can be said to be a reasonable explanation. The opinion expressed was that the mandate of law cannot be diluted by issuing circular especially when there is no power to issue such directions regarding transfer of cases to call book. The impugned show cause notices having been issued long back more than a decade are not sustainable in the eyes of law, and thus, deserve to be quashed - petition allowed. Issues Involved:1. Quashing of show cause notices due to delay in adjudication.2. Applicability of Section 11A of the Central Excise Act, 1944.3. Compliance with statutory time limits for adjudication.4. Validity of transferring cases to the call book.Detailed Analysis:1. Quashing of Show Cause Notices Due to Delay in AdjudicationThe petitioners sought the quashing of show cause notices dated 02.03.2010 and 06.05.2010, citing an 11-year delay in adjudication. The court noted that no proceedings were conducted from 2010-2018 despite multiple correspondences and adjournments, leading to the petitioners' grievance. The court acknowledged the undue delay and found it unreasonable.2. Applicability of Section 11A of the Central Excise Act, 1944The petitioners relied on Section 11A of the Central Excise Act, 1944, which prescribes a six-month period for concluding proceedings in normal cases and one year in cases involving fraud, collusion, etc. The court referred to the relevant provisions of Section 11A (1), (4), and (11) and emphasized that the proceedings should be concluded within the statutory time limits.3. Compliance with Statutory Time Limits for AdjudicationThe court examined similar cases, including the Division Bench judgment in 'M/s Mentha & Allied Products Ltd.' and the Gujarat High Court's decision in 'M/s Siddhi Vinayak Syntex Private Limited.' It was observed that delays in adjudication without proper explanation are unlawful and arbitrary. The court reiterated that the statutory mandate requires adherence to prescribed time limits, and any deviation without valid reasons is not permissible.4. Validity of Transferring Cases to the Call BookThe court scrutinized the practice of transferring cases to the call book, as discussed in the Gujarat High Court's judgment. It was held that such transfers are contrary to the statutory mandate and cannot be justified as a reason for delay. The court noted that the Central Board of Excise and Customs (C.B.E. & C.) lacks the authority to extend statutory time limits through circulars, and such actions are beyond their scope.Conclusion:The court concluded that the show cause notices issued more than a decade ago and the prolonged non-adjudication were unsustainable in law. The impugned notices were quashed, and the petition was allowed. The judgment underscores the importance of adhering to statutory time limits and the invalidity of transferring cases to the call book without proper justification.