AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2023 (6) TMI 748
X X X X Extracts X X X X
X X X X Extracts X X X X
.... in all these writ applications have initially challenged the respective show cause notices (SCN) of the year 1994 to 1997 and the respective notices of personal hearing issued in the year 2022, i.e., after a lapse of about 27 to 29 years. During pendency of these writ applications the respondent-Department vide its common Order in Original (OIO) dated 17.2.2023; confirmed the demand as made in the respective show-cause notices. The petitioner thus filed interlocutory application in respective applications which was allowed by this Court and the common Order in Original dated 17.2.2023 confirming the demand in the respective show-cause notices has been impugned. 3. It may be noted at this stage itself that the personal hearing notices was issued in respect of 11 show cause notices; against one such notice dated 9.12.1993 for the period June, 1993 to November, 1993, the petitioner had moved this Court in W.P.T No. 308 of 2023. This Court vide its order dated 14.2.2023 quashed the show cause notice along with the notice of personal hearing on the ground of inordinate delay. For brevity the details of show cause notices and its period is mentioned herein below in tabular chart. Sr.N....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ctronic Overhead Crane (EOC) without payment of duty. It was further alleged that Growth Shop wrongly availed the benefit of Exemption Notification No. 118/75-CE dated 30.04.1957 as the goods cleared were not parts of Crane but a fully functional Crane. The Petitioner duly replied to the said Show Cause Notice by stating that no complete Crane was assembled/manufactured in the Growth Shop and it was assembled and installed finally at the Steel Plant of TISCO, Jamshedpur, and, what was cleared was parts of Crane. Final assembly, erection and commissioning of Crane was done at Jamshedpur Plant. However, the Collector did not agree with the contentions of the petitioner and held that the goods removed by the growth shop of the petitioner was a fully functional crane and levied excise duty @ 20% ad valorem. Being aggrieved, the petitioner preferred a writ petition before the Patna High Court being C.W.J.C. No. 3764 of 1985. The Hon'ble Patna High Court decided the case against the petitioner and held that the goods delivered to steel plant of TISCO was, in fact, a fully functional Crane and not just parts of Crane vide its order dated 09.03.1987. Against the said Judgment of the....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nal for fresh examination. Thereafter, there has been no adjudication of the show cause notice dated 3.1.1995 impugned in W.P.T. No. 826 of 2022 and similar show cause notices involved in other writ petitions; details of which have already been stated herein above. It may be noted that in file recording brought on record by the petitioner, there is no noting between the period 2000 to 2007. However, on 31.1.2007, the Additional Commissioner first recommends taking out the case from Call Book since the issue had attained finality. However thereafter on 26.10.2007 it has been recorded that since the earlier show cause notice i.e., dated 13.8.1990, was pending before Tribunal, the case may be continued in call book. The Commissioner accorded permission of the same on 26.10.2007. No further file noting has been brought on record after 20.10.2007. 9. Unexpectedly, on 30.11.2022, for the first time, after a lapse of about 28 years, a notice for personal hearing was issued, fixing the date of hearing on 15.12.2022. Similar notices for personal hearing were also issued for the other period. On 15.12.2022, since the matter was very old, petitioner filed request for adjournment of persona....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Mittal has made following submissions:- (i) The present dispute is squarely covered by the decision rendered in W.P.(T) No. 308 of 2023 which was delivered by this Court on 14.02.2023. This Court in the said case have authoritatively held that adjudication of show cause after 29 years would be contrary to the mandate of Section 11A(11) of the Central Excise Act, 1944 and would lead to unreasonable and arbitrary results. (ii) Judicial propriety and judicial discipline required the respondents to await the adjudication of the present writ applications. Though the Commissioner was aware and apprised that one writ application of same nature has been allowed by this Court but he acted in undue haste and deliberately decided the 10 show cause notices just after 3 days of the order passed in W.P.(T) No. 308 of 2023. In this regard he referred to the judgment passed in the case of Godrej Sara Lee Ltd. Vs. Excise & Taxation Officer, reported in (2023) SCC Online Supreme Court 95. (iii) The aforesaid action of the respondent- Commissioner was not bona-fide and has attempted to make the present writ applications infructuous. (iv) Even accepting the Circular No. 1053/2/2017- CX dated 1....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... also the CBIC circulars cited by the parties and the decisions relied upon by learned counsel for the petitioner. 18. The facts as borne out from the pleadings on record need no repetition. The impugned show cause is of 9th December 1993 (Annexure-5) issued upon the petitioner asking them to show cause as to why the appropriate excise duty amounting to Rs. 1,67,42,847.30 be not imposed upon him under the provisions of Rules 9(B), 52A, 173(B), 173(F) and 173(G) of Central Excise Rules, 1944 and Section 11A of the CEA, 1944 alleging less payment of duty due to misclassification. The respondents had kept the impugned show cause notice and ten other SCNs as indicated in the chart above in the call book on the ground that the matter was sub-judice. However, from the pleadings on record and also from the averments made in the counter affidavit, it appears that none of the conditions as enumerated in the CBIC circular / guidelines relied upon by the respondents and also by the petitioner stood satisfied for transferring the matter to the call book. It is not a case where the department had gone in appeal before the learned CEGAT or before the Apex Court, rather it was the petitioner wh....
X X X X Extracts X X X X
X X X X Extracts X X X X
....preme Court/High Court/CEGAT, etc. 3. Cases where audit objections are contested. 4. Cases where the Board has specifically ordered the same to be kept pending and to be entered into the call book." In circular dated 28th May 2003 : "3. It is further directed that a one-time comprehensive review of all the pending call book cases will be done by respective CCEs. The Chief Commissioner may monitor such review periodically in their respective zones. The progress report of the call book cases should continue to mention in the MTR as well as in the monthly statements of the progress achieved in "Key Result Areas". In circular dated 10th March 2017 : "9.4 Intimation of Call Book cases to notice: A formal communication should be issued to the notice, where the case has been transferred to the call book." 19. In this regard, it is pertinent to refer to the provisions of Section 11A of the CEA which reads as under :- SECTION 11A OF THE CENTRAL EXCISE ACT, 1944 "SECTION 11A- Recovery of duties not levied or not paid or short-levied or short-paid or erroneously refunded. - (1) Where any duty of excise has not been levied or paid or has been short-levied or short-paid or erron....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Agencies Aromatics Private Limited Vs. Union of India & Ors,. para-14 to 17 and Harkaran Dass Vedpal Vs. Union of India, para-3, 9 and 11 to 15 have been specifically relied upon by the petitioner. 21. Petitioner has also relied upon the recent judgment of the Apex Court, in Special Leave to Appeal (Civil) No. 12376 of 2022 dated 29th July 2022 arising out from a judgment of Punjab and Haryana High Court wherein the show cause notice remain unadjudicated for 11 years. In the peculiar facts and circumstances of the case the Apex Court refused to interfere in the matter and the special leave petition was dismissed. The decision in the case of Eastern Agencies Aromatics Private Limited (Supra) relates to the delay of nine years in adjudication of a show cause notice under Section 28 of the Customs Act, 1962 which also contains a similar provision "if it is possible to do so". The opinion of the learned Bombay High Court at para 14 to 17 are quoted hereunder for easy reference: 14. Perusal of the show cause notice shows that the breach alleged for initiating action for demanding the forgone import duty was on the ground of irregular exports by the exporters and breach of the provis....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e notice will seriously prejudice the Petitioner. 17. In the present case, reasons given by the Respondents for the delay caused in seeking to revive the show cause notice do not constitute any reasonable ground and the delay caused is not sustainable, as the same is in breach of the principles of natural justice. Though in Affidavit-In-Reply it is sought to be contented that the period of limitation prescribed by the amending Act, 2018 is not applicable to the present show cause notice of the year 2013, nothing was argued before us in support of this contention. In our view, even otherwise the powers of such nature of adjudicating the show cause notice are required to be exercised within reasonable time. We do not find any justification for the inaction on the part of the Respondents for keeping the adjudication of the show cause notice pending and for seeking revival of the same after a period of 9 years. For the reasons recorded above, the show cause notice impugned in the Petition is required to be quashed and set aside and it is also necessary to prohibit the Respondent from adjudicating the show cause notice any further." 22. Similar is the view expressed by the Punjab an....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e Apex Court has held at paragraph nos. 23, 35 and 39 as under. "23. Our attention was drawn by Mr. Lakshmikumaran to the decision of this Court reported in 1992 Supp (1) SCC 443 (Union of India v. Kamlakshi Finance Corporation Ltd.) in support of the proposition that in disposing of quasi-judicial issues before them, the Revenue Officers are bound by the decisions of the appellate authorities and that the principle of judicial discipline requires that the orders of the higher appellate authorities are followed unreservedly by the subordinate authorities. 35. In our view, the Revisional Authority might have been justified in exercising suo motu power to revise the order of the Assessing Authority had the decision of the Tribunal been set aside or its operation stayed by a competent Court. So long it is not disputed that the Tribunal's decision, having regard to the framework of classification of products/tax liability then existing, continues to remain operative and such framework too continues to remain operative when the impugned revisional orders were made, the Revisional Authority was left with no other choice but to follow the decision of the Tribunal without any reser....
X X X X Extracts X X X X
X X X X Extracts X X X X
....or long 13 years till issuance of notice for personal hearing on 13.08.2019. After the petitioner approached this Court by filing the present writ petition on 06.09.2019 with due intimation to the respondents, respondent No. 3 went ahead and passed the order-in- original dated 11.11.2019. We fail to understand when the respondents could wait for 13 long years after issuance of the show-cause notices, there could not have been any earthly reason to proceed at such great speed and pass the order-in-original before the Court could adjudicate on the correctness of the action of the respondents. Is it open to the respondents to materially alter the subject matter of the writ petition pending before the Court and then contend that because of such material alteration, the writ petition has become infructuous and that the petitioner should avail the alternative remedy of appeal? 25. In M/s. Harihar Collections Vs. Union of India, decided on 15.10.2020, this Court was confronted with a similar situation when during the pendency of the writ petition, Commissioner of Customs had passed review order on 01.10.2020 under section 129D(2) of the Customs Act, 1962. This Court held as under:- "2....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rs that the learned Commissioner has sought to justify its action by making following statement made in the Order in Original and in the counter affidavit which are quoted hereinbelow:- Order in Original (i) Para 7.5(vii) at Page 10 of OIO - ". the Noticee have nothing to defend the case, they have filed Writ Petition to quash SCN C. No. MP- 14/TGS/D/92/970_dated 9.12.1993, on the ground of inordinate delay in adjudication and bypassed the stablished norms". (ii) Para 7.5(vii) at Page 10 of OIO - "Further adjournment, so sought. By the Noticee cannot be accorded merely on the ground that the noticee have Writ Petition before Hon'ble High Court taking the plea of inordinate delay". Counter affidavit (i) Page 27 - "Since sufficient time as requested by the Petitioner was allowed and next date of PH was fixed as per request of the Petitioner itself, again seeking further adjournment stating that writ petition have been filed to quash the subject SCN on the ground o delay in adjudication, appeared to be not proper and did not hold merit, as there was no stay on adjudication proceedings on the subject SCNs/ SODs by the Hon'ble Court. (ii) Page 57 "Taxation matters ar....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... semblance of justification is sought to be given by the respondent in the counter affidavit where they have stated that since the issue of classification had been settled, accordingly it was decided to take the show cause notices out from the call book. At multiple places in the impugned order, it has been stated that the issue had attained a finality in 2004 itself. Regarding this stand, we hold that since the issue did attain finality in 2004 itself, there was absolutely no justification in keeping the show cause notices pending thereafter. The file notings show that though the Commissioner was apprised in 2007 that the issue had attained a finality, still a decision was taken by him on 26.10.2007 to keep the cases in the call book. Mere pendency of another matter before the Tribunal when the issue had attained a finality by the Hon'ble Apex Court, cannot be a reason to keep the SCN in the call book. A lapse of 18 years from 2004 to 2022 remains unexplained. Neither is there an explanation for any change of circumstances for taking out the notices from the call book in November 2022. In such circumstances, the SCN and the OIO cannot be countenanced. Reference is made to a recen....
X X X X Extracts X X X X
X X X X Extracts X X X X
....xecution of the judgment, decree or order under challenge. 28. Incidentally we may notice two other decisions of this Court which though not directly in point, the law laid down wherein would be of some assistance to us. In Shankar Ramchandra Abhyankar v. Krishnaji Dattatreya Bapat [(1969) 2 SCC 74 : AIR 1970 SC 1] this Court vide para 7 has emphasised three preconditions attracting applicability of doctrine of merger. They are: (i) the jurisdiction exercised should be appellate or revisional jurisdiction; (ii) the jurisdiction should have been exercised after issue of notice; and (iii) after a full hearing in presence of both the parties. Then the appellate or revisional order would replace the judgment of the lower court and constitute the only final judgment. In Sushil Kumar Sen v. State of Bihar [(1975) 1 SCC 774 : AIR 1975 SC 1185] the doctrine of merger usually applicable to orders passed in exercise of appellate or revisional jurisdiction was held to be applicable also to orders passed in exercise of review jurisdiction. This Court held that the effect of allowing an application for review of a decree is to vacate a decree passed. The decree that is subsequently p....