TaxTMI 
TaxTMI 
2023 (11) TMI 558
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.... the total penalty should have been 137.50 lakh + Rs.275.00 lakhs. 3.0 Notice for hearing was issued to the respondent a number of times which have been received back undelivered. The matter has been adjourned on each occasion for the reason that respondent did not respond to any of the notices issued to them by the registry. Matter has been adjourned for more than 03 times whereas as per proviso to Section 35C 1(A) matter could have been adjourned maximum for 03 times on the request of any party to appeal. For ready reference Section 35C(1A) is reproduced below:- "Section 35C. Orders of Appellate Tribunal. - (1A) The Appellate Tribunal may, if sufficient cause is shown, at any stage of hearing of an appeal, grant time, from time to time, to the parties or any of them and adjourn the hearing of the appeal for reasons to be recorded in writing: Provided that no such adjournment shall be granted more than three times to a party during hearing of the appeal." Rule 21 of the CESTAT Procedure Rules, 1982 provides as follows: "RULE 21. Hearing of appeals ex parte. - Where on the day fixed for the hearing of the appeal or on any other day to which the hearing is ad....
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....w address introduced herself as Smt Kamlesh Verma -sister of Shri Ranjeet Verma. She informed the officers that Shri Ranjeet Verma and Smt Seema Verma had left the address at 165, Deep Nagar, RDSO, Lucknow and the new address was not known to her. She also refused to receive the letters. Thereafter the officers visited the premises at 165, Deep Nagar, RDSO, Lucknow but found it locked and no one was found in the premises. It was informed by the neighbors that the premises was closed since long time. Consequently, the letter granting opportunity of personal hearing to Shri Ranjeet Verma and Smt Seema Verma was sent by speed post but was returned as 'undelivered by the postal authorities. Therefore on 5.8.2010, the Central Excise officers pasted the letter granting opportunity of personal hearing on 17.8.2010 at the front door of M/s Harsh Traders, 165, Deep Nagar, RDSO, Lucknow under the provisions of Section 37 C (1) of the Central Excise Act, 1944. 47. On 17.8.2010, Shri G.K.Dhusia, Consultant for M/s Aditya Packs, Lucknow appeared for personal hearing before the Commissioner, Central Excise and Service Tax, Lucknow and reiterated the points of the written reply and h....
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....dated 21.12.2020 closing the right to cross¬examine the plaintiff's witness. ... 4. As observed hereinabove, present is a classic example of misuse of adjournments granted by the court. It is to be noted that the respondents herein - original plaintiffs filed the suit for eviction, arrears of rent and mesne profit as far as back in the year 2013. That thereafter despite the repeated adjournments sought and granted by the court and even twice the adjournments were granted as a last opportunity and even the cost was imposed, the defendant failed to cross examine the plaintiff's witness. Although the adequate liberty was given to the defendant to cross examine the plaintiff's witness, they never availed of the same and went on delaying the proceedings by repeated prayers of adjournment and unfortunately the Trial Court and even subsequently the High Court continued to grant adjournment after adjournment and as such contributed the delay in disposal of the suit which as such was for eviction. Such approach is wholly condemnable. Law and professional ethics do not permit such practice. Repeated adjournments on one or the other pretext and adopting the dilatory tact....
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....their own peril." 5.2 Commenting on the delay in the justice delivery system, although in respect of the criminal trial, Krishna Iyer, J. in the case of Babu Singh v. State of U.P. (1978) 1 SCC 579 has observed in paragraph 4 as under:" 4. ... Our justice system, even in grave cases, suffers from slow motion syndrome which is lethal to 'fair trial', whatever the ultimate decision. Speedy justice is a component of social justice since the community, as a whole, is concerned in the criminal being condignly and finally punished within a reasonable time and the innocent being absolved from the inordinate ordeal of criminal proceedings." 5.3 In the case of Noor Mohammed v. Jethanand and Anr. (2013) 5 SCC 202, using very harsh words and condemning the repeated adjournments sought by the lawyers and granted by the courts, this court has observed in paragraph 1, 12, 13, 27 and 28 as under:" 1. In a democratic body polity which is governed by a written Constitution and where the Rule of Law is paramount, the judiciary is regarded as sentinel on the qui vive not only to protect the fundamental rights of the citizens but also to see that the democratic valu....
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....d ultimately the divinity of law are likely to make way for apathy and indifference when delay of the present nature takes place, for procrastination on the part of anyone destroys the values of life and creates a catastrophic turbulence in the sanctity of law. The virtues of adjudication cannot be allowed to be paralyzed by adjournments and non demonstration of due diligence to deal with the matter. One cannot be oblivious to the feeling necessities of the time. No one can afford to sit in an ivory tower. Neither a Judge nor a lawyer can ignore "the total push and pressure of the cosmos". It is devastating to expect infinite patience. Change of attitude is the warrant and command of the day. We may recall with profit what Justice Cardozo had said: "It is true, I think, today in every department of the law that the social value of a rule has become a test of growing power and importance." [ Benjamin N. Cardozo, The Nature of Judicial Process (Cosimo Inc., 2009) 73] 13. It has to be kept in mind that the time of leisure has to be given a decent burial. The sooner it takes place, the better it is. It is the obligation of the present generation to march with the time and remi....
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....onor of Mr. Justice Frankfurter and Distinguished Allumni, Occasional Pamphlet No. 3" (Harvard Law School, Cambridge, 1960), pp. 45] 28. In a democratic setup, intrinsic and embedded faith in the adjudicatory system is of seminal and pivotal concern. Delay gradually declines the citizenry faith in the system. It is the faith and faith alone that keeps the system alive. It provides oxygen constantly. Fragmentation of faith has the effect potentiality to bring in a state of cataclysm where justice may become a casualty. A litigant expects a reasoned verdict from a temperate Judge but does not intend to and, rightly so, to guillotine much of time at the altar of reasons. Timely delivery of justice keeps the faith ingrained and establishes the sustained stability. Access to speedy justice is regarded as a human right which is deeply rooted in the foundational concept of democracy and such a right is not only the creation of law but also a natural right. This right can be fully ripened by the requisite commitment of all concerned with the system. It cannot be regarded as a facet of Utopianism because such a thought is likely to make the right a mirage losing the centrality of p....
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....." 19. In Lt. Col. S.J. Chaudhary v. State (Delhi Admn.) [(1984) 1 SCC 722 : 1984 SCC (Cri) 163 : AIR 1984 SC 618] , a threeJudge Bench, while dealing with the role of an advocate in a criminal trial, has observed as follows : (SCC pp. 72324, para 3) "3. We are unable to appreciate the difficulty said to be experienced by the petitioner. It is stated that his advocate is finding it difficult to attend the court from day to day. It is the duty of every advocate, who accepts the brief in a criminal case to attend the trial from day to day. We cannot overstress the duty of the advocate to attend to the trial from day to day. Having accepted the brief, he will be committing a breach of his professional duty, if he so fails to attend." 20. In Mahabir Prasad Singh [(1999) 1 SCC 37 : AIR 1999 SC 287], the Bench, laying emphasis on the obligation of a lawyer in his duty towards the Court and the duty of the Court to the Bar, has ruled as under: (SCC p. 44, paras 1718) "17. ... 'A lawyer is under obligation to do nothing that shall detract from the dignity of the court of which he is himself a sworn officer and assistant. He should at all times pay defere....
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....the setting of a courtroom. But members of the Bar will do well to remember that such flagrant violations of professional ethics and cultured conduct will only result in the ultimate destruction of a system without which no democracy can survive." 5.5 Today the judiciary and the justice delivery system is facing acute problem of delay which ultimately affects the right of the litigant to access to justice and the speedy trial. Arrears are mounting because of such delay and dilatory tactics and asking repeated adjournments by the advocates and mechanically and in routine manner granted by the courts. It cannot be disputed that due to delay in access to justice and not getting the timely justice it may shaken the trust and confidence of the litigants in the justice delivery system. Many a times, the task of adjournments is used to kill Justice. Repeated adjournments break the back of the litigants. The courts are enjoying upon to perform their duties with the object of strengthening the confidence of common man in the institution entrusted with the administration of the justice. Any effort which weakens the system and shake the faith of the common man in the justice dispensa....
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....d and/or granted still the petitioner - defendant never availed of the liberty and the grace shown. In fact it can be said that the petitioner - defendant misused the liberty and the grace shown by the court. It is reported that as such now even the main suit has been disposed of. In view of the circumstances, the present SLPs deserve to be dismissed and are accordingly dismissed." 7. On the basis of the records, the case has been adjudicated by the Original Authority confirming the demand amounting to Rs. 137.50 lakh + Rs.2.75 lakhs. While confirming the demand for invoking the provisions of extended period and for imposition of penalty under Section 11AC, adjudicating authority has recorded as follows: "104 I hold that on 11.5.09, one Pouch Packing Machine installed in the registered premises of M/s Harsh Trader, 165, Deep nagar, Lucknow, was found operational. The excisable / notified goods "Gutkha" with brand name 'Prem Bahar' and 'Partner' (MRP Re 1.00) were being manufactured since Ju;ly 2008 in contravention of Pan Masala Machines (Capacity Determination and Collection of Duty) Rules, 2008. I find, duty amounting to Rs 137.50 Lakhs is demandable and liable to rec....
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....produced below:- "14. Sub-section 1A of Section 11A provides that in case the person in default to whom the notice is given under the proviso to sub-section 1 makes payment of duty in full or in part as may be accepted by him, together with interest under Section 11AB and penalty equal to 25% of the accepted amount of duty within thirty days of the date of receipt of notice then the proceeding against him would be deemed to be conclusive (without prejudice to the provisions of Sections 9, 9A and 9AA) as provided in the proviso to sub-section 2 of Section 11A. Sub-section 1A and the proviso to sub-section 2 were inserted with effect from July 13, 2006 and, therefore, have no application to the periods relevant to the two appeals. 15. Sub-section 2B of Section 11A provides that in case the person in default makes payment of the escaped amount of duty before the service of notice then the Revenue will not give him the notice under sub-section 1. This, perhaps, is the basis of the common though erroneous view that no penalty would be leviable if the escaped amount of duty is paid before the service of notice. It, however, overlooks the two explanations qualifying the ....
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.... by which such increase in the duty takes effect - Explanation. - For the removal of doubts, it is hereby declared that - (1) the provisions of this section shall also apply to cases in which the order determining the duty under sub-section (2) of section 11A relates to notices issued prior to the date on which the Finance Act, 2000 receives the assent of the President; (1) any amount paid to the credit of the Central Government prior to the date of communication of the order referred to in the first proviso or the fourth proviso shall be adjusted against the total amount due from such person.] 17. The main body of Section 11AC lays down the conditions and circumstances that would attract penalty and the various provisos enumerate the conditions, subject to which and the extent to which the penalty may be reduced. 18. One cannot fail to notice that both the proviso to sub-section 1 of Section 11A and Section 11AC use the same expressions : "....by reasons of fraud, collusion or any wilful mis-statement or suppression of facts, or contravention of any of the provisions of this Act or of the rules made thereunder with intent to evade payme....
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....for determination in all these appeals is whether Section 11AC of the Central Excise Act, 1944 (in short the "Act') inserted by Finance Act, 1996 with the intention of imposing mandatory penalty on persons who evaded payment of tax should be read to contain mens rea as an essential ingredient and whether there is a scope for levying penalty below the prescribed minimum. Before the Division Bench, stand of the revenue was that said section should be read as penalty for statutory offence and the authority imposing penalty has no discretion in the matter of imposition of penalty and the adjudicating authority in such cases was duty bound to impose penalty equal to the duties so determined. The assessee on the other hand referred to Section 271(1)(c) of the Income Tax Act, 1961 (in short the IT Act') taking the stand that Section 11AC of the Act is identically worded and in a given case it was open to the assessing officer not to impose any penalty. The Division Bench made reference to Rule 96ZQ and Rule 96ZO of the Central Excise Rules, 1944 (in short the "Rules') and a decision of this Court in Chairman, SEBI v. Shriram Mutual Fund & Anr. [2006 (5) SCC 361] and was of the view that t....