AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2024 (12) TMI 269
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....0281/2024, 50268/2024, 55679/2023, 50164/2024, 50570/2024, 55188/2023, 50284/2024, 50283/2024, 55678/2023, 55410/2023, 55558/2023, 55412/2023, 53972/2023, 55571/2023 55411/2023 55067/2023, 55069/2023, 55680/2023, 55555/2023, 54690/2023, 54693/2023, 54872/2023, 55563/2023, 55682/2023, 55515/2023, 54783/2023, 55272/2023, 55163/2023, 55513/2023, 50265/2024, 50266/2024, 55557/2023, 55519/2023, 54870/2023, 55566/2023, 50594/2024, 55559/2023, 55677/2023, 55246/2023, 55270/2023, 55269/2023, 50184/2024, 50185/2024, 50183/2024, 50069/2024, 55443/2023, 50068/2024, 50066/2024, 50063/2024, 50065/2024, 55314/2023, 50171/2024, 55385/2023, 55386/2023, 50441/2024, 50187/2024, 50193/2024, 50078/2024, 55472/2023, 50005/2024, 50212/2024, 50174/2024, 55165/2023, 55166/2023, 55282/2023, 55286/2023, 55298/2023, 55283/2023, 55155/2023, 55213/2023, 55287/2023, 55297/2023, 55284/2023, 55277/2023, 55237/2023, 55252/2023, 55243/2023, 55279/2023, 55666/2023, 50278/2024, 50279/2024, 55278/2023, 55225/2023, 55421/2023, 55420/2023, 55238/2023, 55280/2023, 55244/2023, 55245/2023, 55236/2023, 55234/2023, 50135/2020, 50134/2020, 50614/2020, 50615/2020, 50136/2020, 52290/2022, 52289/2022, 50186/2024, 55681/2023, 500....
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.... Excise Act relating to relevance of statements under certain circumstances were not complied with. 4. The first issue that has been raised by the learned counsel for Kopertek and the learned counsel appearing for the other appellants that the impugned orders deserve to be set aside for the sole reason that the Central Excise Officer did not determine the amount of duty of excise under sub-section (10) of section 11A within the period stipulated in sub-section (11) of section 11A shall be examined first, because in the event this issue is decided in favour of the appellants, it may not be necessary to examine the other two issues that have been raised by the learned counsel for the appellants. 5. To examine this issue, it would be appropriate to reproduce sub-sections (10) and (11) of section 11A. 6. Sub-section (10) of section 11A is as follows: "11A(10) The Central Excise Officer shall, after allowing the concerned person an opportunity of being heard, and after considering the representation, if any, made by such person, determine the amount of duty of excise due from such person not being in excess of the amount specified in the notice." 7. Sub-section (11) of section 11A....
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....sued under sub-section (4) of section 11A. Thus, the Central Excise Officer had to determine the amount of duty within one year from the date of notice, where it was possible to do so. 10. The learned authorized representative appearing for the department has, in the written submissions, provided a date and event chart regarding the proceedings undertaken by the Adjudicating Authority pursuant to the issuance of the show cause notice. It is reproduced below: Date Event 28.04.2015 Show cause notice issued requiring the noticee to show cause within 30 days, failing which the case would be decided ex-parte without any further communication. 07.09.2016 1st personal hearing fixed. Only M/s. Arihant Trading and Metals requested for supply of Relied Upon Documents 22.02.2018 Cross-examination allowed. However, none of the witness appeared 10.04.2018 Cross-examination allowed 11.04.2018 Cross-examination allowed 17.04.2018 Cross-examination allowed 20.09.2018 Cross-examination allowed 04.04.2019 Cross-examination allowed 17.06.2019 Cross-examination allowed 17.10.2019 Cross-examination allowed 20.10.2019 Cross-examination adjournment 12.01.2021 Cross-....
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....opriate stage. 14. Learned counsel for Kopertek, however, submitted that the department has not been able to substantiate that the Adjudicating Authority was prevented by "such circumstances or insurmountable exigencies" from concluding the adjudication proceedings within the stipulated period contemplated under sub-section (11) of section 11A. In this connection, learned counsel placed reliance upon the judgment of the Delhi High Court in Swatch Group India Pvt. Ltd. vs. Union of India 2023 (386) E.L.T. 356 (Del.), wherein the provisions of section 28 (9) of the Customs Act, 1962 [the Customs Act], which also require the proper officer to determine the amount of duty within a specified period, when it was possible to do so. Learned counsel placed reliance upon certain other decisions of High Courts, to which reference shall be made at the appropriate stage. 15. The said submissions advanced by the learned counsel for the appellant and the learned authorized representative appearing for the department have been considered. 16. The provisions of sub-section (11) of section 11A of the Central Excise Act have been reproduced above. Sub-section (9) of section 28 of the Customs Act w....
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....the amount of duty or interest under sub-section (8) and in such case, the time specified in sub-section (9) shall apply not from the date of notice, but from the date when such reason ceases to exist" 18. In the context of the un-amended provisions of section 28 (9) of the Customs Act, which are pari materia to sub-section (11) of section 11A of the Central Excise Act, the Delhi High Court made the following observations: "31. Therefore, the question, which requires consideration now is whether in terms of erstwhile Section 28 (9) of the Customs Act, the impugned SCN dated 14-2-2018 has lapsed having not been adjudicated within the period of 12 months. In other words, whether in the facts and circumstances of the present case, it was not possible for the Revenue to adjudicate the impugned SCN within the period of 12 months from the date of issuance. 32. The unamended Section 28 (9) of the Customs Act, specifically provides that the proper officer 'shall' determine the amount of duty within six months or within one year, as the case may be, from the date of notice. It only provides certain degree of inbuilt flexibility by incorporating the words 'where it is possible to do so'....
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....ded Section 28 (9) of the Customs Act that the duty shall be levied within a period of 12 months from the date of issuance of the notice. 41. It is also significant to note that the record of personal hearing dated 9-2-2021 specifically notes that the advocate appearing for the noticee had reiterated its written submissions dated February, 2019. The impugned SCN is stated to have been kept in abeyance thereafter pursuant to the circular dated 17-3-2021. 42. The respondent has merely produced various letters received from the petitioner, DRI, and others, and has contended that some adjournments were asked for by the petitioners. Admittedly, the matter was listed from time to time for a personal hearing. However, no justification has been provided as to why it was not possible for the Department to determine the amount of Customs duty within the prescribed period of time. 43. We have perused the documents and letters produced by the Department as referred above. It is seen that for a period of almost three years, various letters were exchanged. The matter was fixed for personal hearing on more than five occasions. No reason has been provided as to why the hearings were not conc....
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.... that Central Excise Officer shall determine the amount of duty within six months in case notice has been under sub-section 1 thereof, whereas in the case of fraud, collusion, etc., the period prescribed is one year. No doubt, the words 'where it is possible to do so' have been used, however, that will not stretch the period to decades as is in the cases in hand. 18. In Bhatinda District Co-op. Milk P. Union Limited's case (supra), Hon'ble the Supreme Court upheld a Division Bench judgment of this Court where opinion expressed was that where no period of limitation is provided for exercise of any power, any notice issued more than five years thereafter was held to be unreasonable. 19. For the reasons mentioned above, we find that the notices in the present cases having been issued more than decade back and the proceedings having not been concluded within reasonable time, the same deserves to be quashed." 22. The Delhi High Court in Nanu Ram Goyal vs. Commissioner of CGST and Central Excise, Delhi 2023 (74) G.S.T.L. 17 (Del.) considered the provisions of section 73 of the Finance Act, 1994 [the Finance Act]. At the relevant time, this section did not provide for determination o....
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....le 12, the officer may act arbitrarily in recovering the amount after lapse of long period of time. We find no substance in the submission. While it is true that Rule 12 does not prescribe any period within which recovery of any duty as contemplated by the Rule is to be made, but that by itself does not render the Rule unreasonable or violative of Article 14 of the Constitution. In the absence of any period of limitation it is settled that every authority is to exercise the power within a reasonable period. What would be reasonable period, would depend upon the facts of each case. Whenever a question regarding the inordinate delay in issuance of notice of demand is raised, it would be open to the assessee to contend that it is bad on the ground of delay and it will be for the relevant officer to consider the question whether in the facts and circumstances of the case notice or demand for recovery was made within reasonable period. No hard and fast rules can be laid down in this regard as the determination of the question will depend upon the facts of each case." 20. In a later decision in State of Punjab & Ors. v. Bhatinda District Cooperative Milk Producers Union Ltd. [(2007) 11....
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....ncerned officer contrary to law, who cannot be expected to violate the mandate of law. As such issues vitally affect the public revenue, we also observed that such inaction on the part of such officers would adversely affect the interest of the revenue. We also observed that if prompt adjudication of the show cause notice is not undertaken, such lapse of time and certainly a long lapse of time is likely to cause irreversible changes frustrating the whole adjudication.***** ***** 17. In our opinion, even in absence of the provisions of sub-section (4)(B) of Section 73, respondent No. 2 could not have acted oblivious to the settled principle of law, that a show cause notice would be required to be adjudicated within a reasonable time depending the facts of each case. However, as observed by us in our decision in Coventry Estates Pvt. Ltd. v. Joint Commissioner, CGST and Central Excise & Anr. (supra), reasonable time would not be an egregious, unjustified and unexplained inordinate delay. Having perused the reply affidavit, we find that no justification whatsoever is given by the Deputy Commissioner in Commissioner not adjudicating the show cause notice. We are thus of the opinion....
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.... Pvt. Ltd. vs. Union of India & Ors. [Writ Petition No. 1313 of 2021]; decision of this Court in Shreenathji Logistics vs. Union of India & Ors. [Writ Petition No. 540 of 2020]; in Sushitex Exports (India) Ltd. & Ors. vs. Union of India & Anr. [2022 SCC Online Bom 191]; in Sanghvi Reconditioners Pvt. Ltd. vs. Union of India, through the Secretary, Department of Revenue & Ors. [2017 SCC Online Bom 9781]; in Reliance Industries Ltd. vs. Union of India [2019 (368) E.L.T. 854 (Bom.)] and in Parle International Ltd. vs. Union of India [2021 (375) E.L.T. 633 (Bom.)]. 9. Mr. Raichandani would submit that all these decisions would show a consistent view being taken by the Court that the show cause notice cannot be adjudicated after inordinate delay and the same would be required to be dropped, accepting the well-settled principles of law, that not only the proceedings are required to be initiated within a reasonable period but they are required to be adjudicated within a reasonable period. It is his submission that in the present case, there is nothing to indicate that the delay in any manner could be justified by the department. ***** 15. Considering the plain consequences, Section 73....
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....r, whether such period is a reasonable period would depend upon the facts and circumstances of each case. 18. An inordinate delay is seriously prejudicial to the assessee and the law itself would manifest to weed out any uncertainty on adjudication of a show cause notice, and that too keeping the same pending for such a long period itself is not what is conducive. 19. It is well said that time and tide wait for none. It cannot be overlooked that the pendency of show cause notice not only weighs against the legal rights and interest of the assessee, but also, in a given situation, it may adversely affect the interest of the revenue, if prompt adjudication of the show cause notice is not undertaken, the reason being a lapse of time and certainly a long lapse of time is likely to cause irreversible changes frustrating the whole adjudication. 20. We are also of the clear opinion that a substantial delay and inaction on the part of the department to adjudicate the show cause notice would seriously nullify the noticee's rights casuing irreparable harm and prejudice to the noticee. A protracted administrative delay would not only prejudicially affect but also defeat substantive righ....
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....ation has to be done within a reasonable period. However, what would be a reasonable period would depend upon the nature of the Statute, rights and liabilities thereunder and other relevant factors. 26. It is in the light of the aforesaid principles that the facts of the appeal would have to be examined. 27. The show cause notice, in the present case, was issued on 28.04.2015. It called upon the noticees to show cause within thirty days from the date of receipt of notice, failing which it was specifically provided that the matter would be adjudicated ex-parte without any further communication. It is seen that the period one year from 28.04.2015 expired on 27.04.2016. Even if cause was not shown by the noticees to the said notice, the Adjudicating Authority should have proceeded to decide the matter ex-parte, but what is seen is that the Adjudicating Authority even let this statutory time limit of one year pass without even adhering to the stipulation contained in the show cause notice that the matter would be decided ex-parte even if no cause is shown within thirty days. It appears that it is only on 07.09.2016 i.e. almost after a period of five months after the expiry of one yea....
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....to strictly adhere to the principles of natural justice that require adequate opportunities to be given to the noticees before the adjudicating the show cause notice the Adjudicating Authority was justified in granting time to the noticees to cross-examine and also provide adequate personal hearing. 30. It is not possible to accept this contention of the learned authorized representative appearing for the department. 31. The principles of natural justice do not admit of such delayed adjudication where time limit is fixed under a Statute to adjudicate the matter. The Adjudicating Authority cannot endlessly wait and has to utilize its discretion in a fair and reasonable manner so as to balance between the principles of natural justice and the time set out in the Statute for adjudication of the show cause notice. The show cause notice required the noticees to file a reply within thirty days, failing which it was mentioned that the matter would be adjudicated ex-parte. Assuming that no reply was filed by the noticees, still the Adjudicating Authority should have proceeded to adjudicate the show cause notice ex-parte as it was bound to adjudicate in show cause notice within one year, ....
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....ice has not to be adjudicated within a reasonable period of time. These two judgments of the Supreme Court have been followed by the Delhi High Court in Nanu Ram. The Bombay High Court in UPL and Coventry Estates also held that even when no time period is prescribed for adjudication of a show cause notice, the same has to be adjudicated within a reasonable period of time. 36. In Maggie Marketing, the main contention advanced by the learned counsel for the appellant was regarding retrospective application of the amendment made on 29.03.2018 in section 28 (9) of the Customs Act. It was contended that though the show cause notice was issued on 17.10.2017, but still section 28 (9) of the Customs Act, as amended on 29.03.2018, would be applicable. This is evident from paragraphs 9 and 10 of the decision of the Tribunal and the relevant portions are reproduced below: "9. The records indicate that in response to the show cause notice dated 17.10.2017, the appellant submitted an interim reply dated 07.04.2021 and contended that though section 28 (9) was amended on 29.03.2018, but it will also be applicable to show cause notices issued prior to this date and so in view of the amended pro....
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.... for the department, therefore, do not help the department. 42. The aforesaid discussion would lead to the inevitable conclusion that the impugned order would have to be set aside only for the reason that the adjudication was not completed within the time limit prescribed under sub-section (11) of section 11A of the Central Excise Act. 43. It would, therefore, not be necessary to examine the other two contentions raised by the learned counsel for the appellants. 44. The first issue that has been decided also arises for consideration in all the remaining 209 appeals that have been filed by the assessees for setting aside the impugned order. This would be apparent from the chart annexed as "Annexure A" to this order wherein details of the Excise Appeals, date of show cause notice, and the date of order has been provided. 45. It is evident that in all the 209 cases, the adjudication has taken place beyond the period stipulated in sub-section (11) of section 11A of the Central Excise Act and there is no plausible explanation as to why it was not possible for the Adjudicating Authority to complete the adjudication process within the stipulated time. 46. Thus, the impugned orders th....
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.... E/55278/2023 27.12.2016 29.06.2022 52 E/55238/2023 29.03.2017 21.07.2022 53 E/55236/2023 01.05.2017 20.06.2022 54 E/55681/2023 30.03.2017 31.05.2022 55 E/50076/2024 27.12.2016 30.06.2022 56 E/50294/2024 27.12.2016 30.11.2022 57 E/50369/2024 19.05.2017 30.11.2022 58 E/50360/2024 27.12.2016 16.01.2023 59 E/50362/2024 30.11.2016 31.01.2023 60 E/50290/2024 29.07.2016 16.01.2023 61 E/50291/2024 10.11.2016 30.11.2022 62 E/50361/2024 17.02.2017 30.11.2022 63 E/55741/2023 28.04.2015 14.06.2022 64 E/53916/2023 01.03.2016 13.06.2019 65 E/55520/2023 19.05.2017 31.05.2022 66 E/55492/2023 31.03.2017 28.02.2022 67 E/50457/2024 29.06.2016 03.06.2022 68 E/55713/2023 27.05.2016 25.04.2022 69 E/55493/2023 11.11.2016 28.03.2022 70 E/50084/2024 30.05.2016 30.03.2022 71 E/55486/2023 30.03.2017 31.03.2022 72 E/55568/2023 27.12.2016 30.06.2022 73 E/55522/2023 25.04.2017 28.04.2022 74 E/55226/2023 09.02.2016 30.06.2022 75 E/55523/2023 31.03.2017 29.04.2022 76 E/50067/2024 05.04.2017 29.04.2022 77 E/50458/2024 25.04.2017 29.04.2022 78 E/55521/2023 31.03.2017 31.03.2022 79 E/55517/2023 25.04.201....
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....2 163 E/50186/2024 30.03.2017 31.05.2022 137 E/52178/2022 28.04.2015 14.06.2022 138 E/52210/2022 28.04.2015 14.06.2022 139 E/52179/2022 28.04.2015 14.06.2022 140 E/52207/2022 28.04.2015 14.06.2022 141 E/52208/2022 28.04.2015 14.06.2022 142 E/52209/2022 28.04.2015 14.06.2022 143 E/50554/2024 26.09.2016 03.06.2022 144 E/50553/2024 26.09.2016 03.06.2022 145 E/55711/2023 28.04.2015 14.06.2022 146 E/53917/2023 01.03.2016 13.06.2019 147 E/51826/2021 01.03.2016 13.06.2019 148 E/51794/2021 01.03.2016 13.06.2019 149 E/55776/2023 31.03.2017 28.02.2022 150 E/55777/2023 31.03.2017 28.02.2022 151 E/54810/2023 11.11.2016 28.03.2022 152 E/54854/2023 30.05.2016 30.03.2022 153 E/54696/2023 30.03.2017 31.03.2022 154 E/55769/2023 30.03.2017 31.03.2022 155 E/55595/2023 28.12.2016 30.06.2022 156 E/55407/2023 28.12.2016 30.06.2022 157 E/50178/2024 10.02.2016 30.06.2022 158 E/55705/2023 10.02.2016 30.06.2022 159 E/55707/2023 10.02.2016 30.06.2022 160 E/50177/2024 31.03.2016 29.06.2022 161 E/50097/2024 31.03.2016 29.06.2022 162 E/50102/2024 25.04.2017 28.04.2022 163 E/50034/2024 25.04.2017 30.06....