Show-cause notice adjudication after 7 years time-barred under Section 11A(1) Central Excise Act

The HC ruled that adjudication of a show-cause notice after more than 7 years is time-barred under Section 11A(1) of the Central Excise Act, 1944. The court held that the phrase "where it is possible to do so" is elastic only when reasonable grounds beyond the Adjudicating Authority's control prevent timely completion, not otherwise. The court emphasized that the 5-year maximum limitation period under Section 11A should be considered reasonable for adjudication completion. Delay exceeding this timeframe without extraordinary circumstances violates Article 14 of the Constitution. The application was allowed.

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Issues Involved:
1. Quashing of Show Cause Notice.
2. Quashing of Order-in-Original.
3. Refund of amount collected during investigation.
4. Payment of interest on the refunded amount.
5. Quashing of Notice for Personal Hearing.

Summary:

1. Quashing of Show Cause Notice:
The petitioners challenged the impugned common Show Cause Notice dated 22.09.2014 issued u/s 11A of the Central Excise Act, 1944. The counsel for the petitioners argued that the delay in adjudication of the show-cause notice for more than 7 years is contrary to Section 11A (11) of the Central Excise Act, 1944, which mandates a time limit for adjudication. The court observed that the words "where it is possible to do so" under Section 11A (11) must be read reasonably and cannot extend the time limit indefinitely unless there are extraordinary situations beyond the control of the adjudicating authority.

2. Quashing of Order-in-Original:
The petitioners sought to quash the impugned common Order-in-Original dated 30.06.2022 passed by the Respondent No. 1. The court noted that the adjudication of the show-cause notice was kept pending for more than 7 years, which violates the reasonable time frame set out under Section 11A (11) of the Central Excise Act, 1944. The court held that the delay in adjudication causes prejudice to parties and is contrary to Article 14 of the Constitution of India.

3. Refund of Amount Collected During Investigation:
The petitioners requested the refund of Rs. 50.00 Lacs collected during the investigation. The court did not specifically address this issue in the judgment, but the quashing of the show-cause notice and Order-in-Original implies that the collection of the amount was without authority of law.

4. Payment of Interest on the Refunded Amount:
The petitioners sought interest on the refunded amount at 12% P.A. The court did not specifically address this issue, but the quashing of the show-cause notice and Order-in-Original implies that the petitioners may be entitled to interest as per applicable laws.

5. Quashing of Notice for Personal Hearing:
The petitioners challenged the impugned Notice dated 09/10.05.2022 issued by the Respondent No. 4 for personal hearing. The court observed that the repeated delays and fixing of personal hearing dates over the years without concluding the adjudication process is unreasonable and arbitrary. The court quashed the notice for personal hearing along with the show-cause notice and Order-in-Original.

Conclusion:
The court quashed the impugned show-cause notice dated 22.09.2014, the impugned Order-in-Original dated 30.06.2022, and the notices issued for personal hearing dated 09/10.05.2022. The court allowed the application with consequential relief(s) and closed any pending I.A.

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