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2022 (9) TMI 318
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....nt No. 3 issued the impugned notices to Petitioner inter alia alleging that Petitioner had contravened provisions of the Cenvat Credit Rules, 2004. The impugned notices on this premise called upon Petitioner to show cause why Central Excise Duty along with interest and penalty should not be recovered from Petitioners. The details of the impugned notices (date, period and amount demanded) are as follows, viz. Date Period Amount Demanded 03.04.2008 March 03 to March 08 Rs. 1,07,95,975-00 02.05.2008 April 07 to June 07 Rs. 4,85,185-00 25.07.2008 July 07 to September 07 Rs. 17,40,145-00 24.10.2008 October 07 to December 07 Rs. 10,56,189-00 30.01.2009 January 08 to March 08 Rs. 24,34,634-00 4. Petitioner by its letter dated 26th July, 2008 replied to the show cause notice dated 3rd April, 2008 and denied the allegations made therein. Thereafter, by a letter dated 8th August, 2008 the Superintendent (Adjudication) Central Excise called upon Petitioner to furnish certain details duly certified by a Chartered Accountant. Petitioner by its letter dated 26th September, 2008 duly submitted the information sought for. 5. Respondent No....
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....(i.e., in the year 2008 and 2009). ii. That there was complete silence from Respondents for well over a decade. iii. That Petitioner was never informed that the impugned notices were transferred to call book. iv. That proceedings were suddenly revived after a period of 13 years. v. That the impugned notices were adjudicated upon when the relevant papers were lost and/or untraceable and the concerned officers of Petitioner were no longer with Petitioner. That the impugned notices had become stale since Respondents had not taken any action in respect thereof within a reasonable period of time nor had Respondents ever informed Petitioner of the fate of the impugned notices after issuance thereof. Petitioner only on receipt of the Affidavit in Reply for the first time learnt that Respondents had transferred the impugned notices to call book. Therefore, Petitioner was under the bonafide impression and belief that Respondents had decided not to pursue the impugned notices and had abandoned the same. b. Had Respondents informed Petitioner that the impugned notices were being transferred to call book, Petitioner could have, viz. ....
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....ental authorities, it cannot be faulted for taking the view that its reply had been accepted and the authorities have given a quietus to the matter. As has been rightly held by this Court in Raymond Limited (supra), such delayed adjudication wholly attributable to the revenue would be in contravention of procedural fairness and thus violative of the principles of natural justice. An action which is unfair and in violation of the principles of natural justice cannot be sustained. Sudden resurrection of the show-cause notices after 13 years, therefore, cannot be justified. 27. In any view of the matter when the commencement of adjudication proceedings after inordinate delay of 13 years post-issuance of show-cause notices and submission of reply is held to be untenable in law, any consequential decision or order based on such delayed adjudication would also be rendered invalid. 28. Thus, having regard to the discussions made above and taking an overall view of the matter we have no hesitation to hold that respondents were not justified in commencing adjudication proceeding 13 years after issuance of the show-cause notices dated 01.06.2006 and 28.11.2006. Such adjudic....
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....industan Liver Limited v/s. Union of India 264 ELT 173 (Bom), this Court has observed as under :- "15................... The weight of the judicial pronouncements lean in favour of quashing the proceedings, if there has been an undue delay in deciding the same. See Government of India V/s. The Citedal Fine Pharmaceuticals, Madras and Ors., 42 ELT 515 (S.C.) and the judgment of the Division Benches of this Court in Bhagwandas S. Tolani V/s. B.C. Aggarwal and Ors. Reported in 1983 (12) ELT 44 (Bom.) and Universal Generics Pvt. Ltd. V/s. Union of India reported in 1993 (68) ELT 27 (Bom.). The underlying principle laid down in the said judgments is that in absence of any period of limitation, it is required that every Authority is to exercise the power within a reasonable period." 8. Further, this Court in the case of M/s. Sanghvi Re conditioners (supra) had occasion to consider an identical submission as made before us by the Revenue i.e. show-cause notices had been kept in the call book as an identical challenge in case of another assessee was pending in the Hon'ble Supreme Court. This defence on the part of the Revenue was negatived by the Court. This ....
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....ond (supra) and thus Petitioners case was squarely covered. Hence, the impugned order and impugned notices required to be quashed and set aside. d. It was crucial to appreciate another aspect of the matter which had not fallen for consideration thus far in any of the judgments pertaining to adjudication of stale show cause notices. In the present case for no fault of Petitioner and solely on account of Respondents conduct/negligence, Petitioner had been saddled with an interest liability which was twice the duty/tax amount. It was wholly inequitable and unjust that Respondents on the one hand transferred the impugned notices to call book without even informing Petitioner and yet on the other hand continued to compute interest upon the duty/tax amount for the period for which the impugned notices were kept in call book. Such conduct itself was high-handed, arbitrary and entirely unjust. The interest computed apart from being extortionate was against every cannon of equity, justice and good conscience. e. Additionally, and without prejudice to above submissions, the impugned order was also perverse and belied a deliberate non-application of mind. The Court's attenti....
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....ndent No. 3 had completely glossed over and not so much as even attempted to consider, much less deal with Petitioner's submissions, as also the judgements relied upon. Therefore, it was plain that Respondent No. 3 had acted in a malafide manner and with a predetermined mind with the sole objective of holding Petitioner liable in terms of the charges levied in the impugned notices. 9. Per contra Mr. Mishra, learned counsel, appearing on behalf of Respondents submitted as follows:- a. That Petitioner had an alternate and equally efficacious remedy by way of statutory Appeal. Petitioner's main grievance was that Respondent No. 3 had in the impugned order failed and neglected to consider and/or deal with the several judgments relied upon by Petitioner. Assuming Respondent No. 3 had in fact failed to properly consider the judgments cited this could well be raised in Appeal. In support of his contention Mr. Mishra placed reliance upon a judgment of this Hon'ble Court in the case of Hover Automotive India Pvt. Ltd. vs. Union of India and Others Order dated 29.10.2021 passed in Writ Petition No.2223 of 2021 which held, "16. We must remember that the Commissioner, whil....
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.... a question was put to Mr. Mishra as to whether Petitioners were informed that the impugned notices had been transferred to call book, he fairly conceded that Petitioner had not been so informed. 10. In Rejoinder, Mr. Hidayatullah submitted as follows:- a. That, reliance placed by Respondents upon the judgment in the case of Hover Automotive India Pvt. Ltd. (supra) was entirely misplaced and wholly inapplicable to the facts of the present case. The same was distinguished by pointing out that the challenge in the case of Hover Automotive India Pvt. Ltd. (supra) arose on account of the failure of the assessing authority (in that case) to adequately deal with certain judgments cited before it, whereas the challenge in the present case was primarily one which arose on account of adjudication of stale show cause notices. This fact itself contravened procedural fairness and thus was a breach of the principles of natural justice. Further, the challenge in the present case was in respect of an order passed in violation of the principles of natural justice. Thus, the extraordinary jurisdiction of this Hon'ble Court was rightly invoked and was required to be exercised. b....
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.... v. Adjudication proceedings, delayed for more than a decade (for no fault of answering party and without putting answering party on notice for the reason of delay), defeats the very purpose of issuing show cause notice/s and such delayed adjudication is bad in law; vi. An answering party who does not hear from the authorities for more than 10 years after issuance of show cause notice and submission of reply thereto is justified in taking the view that the reply had been accepted and the authorities had given a quietus to the matter; vii. It is not open to authorities to reopen adjudicating proceedings after a long delay without having compelling and justifiable reasons. viii. Even where adjournments are sought frequently by the answering party, the same should not be granted liberally as this would give the impression that revenue is not interested in proceeding with the matter or rather has a vested interest in assisting the answering party. On considering the above, we find that the facts in the present case are squarely covered by the law laid down by this Hon'ble Court especially in the case of Parle (supra) and Raymond (supra). We fi....
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....he facts and circumstances of the present case, we have no hesitation in holding that Petitioner was entirely justified in concluding that Respondents had abandoned the impugned show notices. B. Additionally, even on merit, we find that the impugned order is liable to be quashed and set aside. We find that there has been a deliberate dereliction of duty on the part of Respondent No. 3 because Respondent No. 3 has brazenly glossed over and ignored the specific submissions and case law relied upon by Petitioner pertaining to adjudication of stale show cause notices without so much as even attempting to deal with the same. The submissions made and case law relied upon by Petitioner would have gone to the root of the matter. We find that it is this conduct of Respondent No. 3 which amounts to a dereliction of duty and has resultantly occasioned grave injustice to Petitioner. Respondent No. 3 is enjoined with a duty and obligation in law to act in a fair, just and judicious manner. Respondent No. 3 has in the facts of the present case failed and neglected to exercise his jurisdiction in a transparent, fair and just manner as required and expected of him by law. Respondent No. 3....
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....nt instituted a petition under Article 226. The existence of an alternate remedy is not an absolute bar to the maintainability of a writ petition under Article 226 of the Constitution. But a writ petition can be entertained in exceptional circumstances where there is: (i) a breach of fundamental rights; (ii) a violation of the principles of natural justice; (iii) an excess of jurisdiction; or (iv) a challenge to the vires of the statute or delegated legislation. 12. In the present case, none of the above exceptions was established. There was, in fact, no violation of the principles of natural justice since a notice was served on the person in charge of the conveyance. In this backdrop, it was not appropriate for the High Court to entertain a writ petition. The assessment of facts would have to be carried out by the appellate authority. As a matter of fact, the High Court has while doing this exercise proceeded on the basis of surmises. However, since we are inclined to relegate the respondent to the pursuit of the alternate statutory remedy under Section 107, this Court makes no observation on the merits of the case of the respondent." ....