TaxTMI 
TaxTMI 
2023 (12) TMI 846
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....bove Central Excise Registration does not have the necessary facility to manufacture milk cans. Therefore, the petitioner utilizes the services of M/s.Oscar Indus to fulfill such orders, a Small Scale Industry ("SSI") job-worker. The petitioner executes purchase orders with job-worker for manufacturing milk cans from the CRSS Sheets and Coils. The petitioner dispatches CRSS Sheets and Coils to the job-worker after payment of excise duty under Rule 11 of the Central Excise Rules, 2002. The job-worker manufactures the milk cans, after which the milk cans are either cleared to the petitioner or directly to the customer. When the job-worker clears the milk cans directly to the customer, the petitioner would reimburse the freight and delivery charges to the job-worker upon production of proof of delivery to the petitioner. The job-worker then raises an invoice for the conversion charges on the petitioner. Subsequently, the petitioner raises an invoice on the customers for the milk cans. No excise duty is charged or reflected on this commercial invoice as the milk cans are NIL rated. 2.2. An EA 2000 Audit was conducted in the petitioner's premises from 25.05.2006 to 30.05.2006 and....
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....onal hearing on 24.03.2023, 28.03.2023 and 31.03.2023 before the second respondent. The petitioner was required to attend the personal hearing on any one of the above dates and in the event of failure, the matter would be decided ex parte on the basis of the documents available on record. Since the impugned show cause notice pertained to transactions which transpired 12 years ago, the petitioner requested the first respondent for time to gather information and records available vide letter dated 17.03.2023, which has been acknowledged by the second respondent, but, no response has been received by the petitioner till date. Left with no other option, the petitioner has filed the present writ petition. 3. Heard Mr.Raghavan Ramabadran, learned counsel for petitioner and Mr.S.R.Sundar, learned Senior Standing Counsel appearing for respondents 1 to 4. 4. Learned counsel for petitioner submitted that the impugned show cause notice was issued on 09.03.2011 and the personal hearing notice was issued on 11.03.2023. The act of scheduling personal hearing on 24.03.2023 after a lapse of 12 years and 15 days, reckoned from 09.03.2011 (date of issuance of show cause notice), amounts to ino....
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....pursuant to the circular issued by the department and hence, the delay has occurred. When this Court posed a question as to whether intimation was provided to the petitioner, learned counsel for respondents fairly submitted that no such intimation was provided to the petitioner. 7. Relying on the counter affidavit, learned counsel submitted that though the audit objections were contested by the respondents, the show cause notice was issued as a protective measure. The show cause notice was ordered to be transferred into call book category based on the Board's Circular No.162/73/1995-CX dated 14.12.1995, as the issue pertains to the petitioner herein falls under category (iii), which deals with cases where audit objections are contested by the then Commissioner on 18.05.2009. Further, there were no statutory obligation on the part of the respondents herein to inform the petitioner about the transfer of their case into the call-book category as the same was introduced only in the year 2017. Thus, the respondents have not violated any of the provisions in transferring the case of the petitioner into callbook category based on the board circular. Learned counsel further submitte....
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....aring notice was issued by the respondents to the petitioner to appear for personal hearing on 09.03.2023. The main grievance of the petitioner is that after a period of 12 years, the respondents have no locus standi to proceed against the petitioner. At this juncture, it would be appropriate to examine the time limit provided in the Act with regard to determination of duty by the Central Excise Officer. 12. Section 11A(11) of the Act reads as follows: "(11) The Central Excise Officer shall determine the amount of duty of excise under sub-section (10) - (a) within six months from the date of notice where it is possible to do so, in respect of cases falling under sub-section (1); (b) within [two years] from the date of notice, where it is possible to do so, in respect of cases falling under sub-section (4)." 13. The petitioner falls under Section 11(b) of the Act. Therefore, the respondents are supposed to have determined the amount of duty within a period of two years. Merely because the words "where it is possible to do so" are provided in the Act, it does not mean that they can take their own time to determine the excise duty. It must be done with....
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.... for 17 long years as no records were available. The High Court in its orders at para 12 has observed: "If law postulates early end to such proceedings and there is no period of limitation prescribed, does not mean that the proceedings initiated could be concluded at the sweet will and fancies of the department." 2. The High Court in para 11 of said order has further quoted Hon'ble Supreme Court in the case of Citedal Fine Pharmaceuticals [2002-TIOL-680-SCCX] where the Apex Court was pleased to hold that in the absence of any period of limitation, it is settled law that every authority should exercise the power within a reasonable period. 3. It is painful to note that in spite of various monitoring mechanisms in existence, such occurrence could not be avoided. The matter has been viewed seriously and all the adjudicating authorities are directed to pass adjudication orders within time limits as prescribed, so that the above said instance is not repeated in future. 4. Further, I am directed to refer to Board letter F.No.275/17/2015-CX.8A dated 11.03.2015 (copy available on CBEC website), on the subject of 'Steps needed to be taken to impro....
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....on proceeding after a long period of 10/15/20 years, particularly when the delay is not on account of any default on the part of the answering party. It further held that reopening of an adjudication proceeding after a long time would cause serious prejudice to the parties, as in the meantime, the relevant records may have been misplaced, the persons who were in charge of the affairs relating to issue raised in the show cause notice may no longer be available. Further, in Cambata Industries Pvt. Ltd. v. Additional Dir. of Enforcement, Mumbai, (2010) 254 ELT 269 (Bom.), this Court held that in absence of any fault on the part of the petitioners, it is not open to the Revenue to re-open proceedings after long delay without justifiable reasons. In Hindustan Lever Limited v. Union of India (2011) 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. The Citedal Fine Pharmaceuticals, Madras and Ors., 1989 (42) E.L.T. 515 (S.C.) and the judgment of the Division Benches of this Cou....
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....is serves two fold purpose One it puts the party to notice that the show cause notice is still alive and is only kept in abeyance. Therefore, the party can then safeguard its evidence, till the show cause notice is taken up for adjudication. Secondly, if the notices are being kept in the call book for some reason, the party gets an opportunity to point out to the Revenue that the reasons for keeping it in call book are not correct and the notices could be adjudicated upon immediately. This is the transparent manner in which the State administration must function. 10. In fact, we note that the above manner of functioning is the objective of the State administration, as our attention has been drawn to the C.B.E. & C. Circular No.1053/2/2017-CX., dated 10/03/2017. In paragraph 9.4 of the above circular of C.B.E. & C. has directed the officers of the department to formally communicate to the party that the notices which have been issued to them, are being transferred to the call book. This would be expected of the State even in the absence of the above circular; the circular only states the obvious. In this case, the show cause notices were kept in the call book not at the ins....