2018 (8) TMI 1394 - HC - Central Excise

Jurisdiction - power of departmental authorities in keeping the adjudicating proceedings arising out of the show cause notice dated 27th April 2005 in abeyance, till the judgment of the Supreme Court in the case of Jindal Drugs Limited - Held that - The only ground on which the Department has decided not to proceed further with the show cause notice against the petitioners is that similar issue is pending before the Supreme Court in the appeal filed by the Department. The department concedes that the situation arising in such case i.e., in the case of Jindal Drugs Limited is identical to the present case. Without conceding to the set of cases being identical, the petitioners also heavily rely on the judgment of the Tribunal in the case of Jindal Drugs Limited. However, this by itself would not be sufficient for the department to keep the proceedings in abeyance. The demand under the show cause notice is considerable. It is not the case of the Department that the Supreme Court has stayed the judgment of the Tribunal in case of M/s. Jindal Drugs Limited, or granted some general injunction against the authorities proceeding in similar cases. The department does not even contend that the judgment of the Supreme Court in case of M/s. Jindal Drugs Limited is likely to be available in the near future. Revenue authorities directed to adjudicate the case - Petition disposed off.

Summary

Issues:
1. Jurisdiction objection by petitioners regarding adjudicating proceedings.
2. Show cause notice served to petitioners for availing CENVAT credit.
3. Transfer of proceedings to "call book" by departmental authorities.
4. Validity of keeping proceedings in abeyance due to pending appeal.
5. Compliance with CBEC circular and statutory time limits for adjudication.

Analysis:
1. The petitioners, a company engaged in manufacturing goods, objected to the jurisdiction of departmental authorities in keeping adjudicating proceedings in abeyance until the Supreme Court's judgment in a related case is available. The petitioners argued that the CENVAT credit was correctly availed, citing legal contentions and judgments in support.

2. The show cause notice dated 27th April 2015 raised objections to the petitioners' availing of CENVAT credit on goods clearance for export. The notice proposed the recovery of a significant amount along with interest and penalty. The petitioners responded, asserting the correctness of the credit availed and relying on relevant case law.

3. The department transferred the proceedings to the "call book" due to the pendency of a similar issue before the Supreme Court in an appeal. The petitioners objected to this procedure, requesting the adjudication to proceed without waiting for the appeal outcome. The department justified its decision based on a circular maintaining cases in abeyance for specified reasons.

4. The court scrutinized the department's practice of keeping cases in the "call book" and emphasized the need for valid reasons to justify such actions. The court noted that the mere pendency of a related appeal before the Supreme Court was not sufficient to keep proceedings in abeyance indefinitely. The court directed the respondents to proceed with the adjudication promptly.

5. The court highlighted the importance of complying with statutory time limits for completing adjudication proceedings. It emphasized that cases should not be kept pending indefinitely without valid reasons. The judgment concluded by directing the department to proceed with the adjudication of the show cause notice without further delay.

This detailed analysis covers the key issues raised in the judgment, providing a comprehensive understanding of the legal proceedings and the court's decision.