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2024 (6) TMI 682 - HC - Central ExciseIssues Involved: 1. Delay in adjudicating show cause notices (SCNs). 2. Non-communication of transfer of SCNs to call book. 3. Procedural fairness and principles of natural justice. Summary: 1. Delay in Adjudicating Show Cause Notices: The petitioner, a wholly owned subsidiary of ICICI Bank Limited, sought a declaration that the proceedings initiated pursuant to two show cause notices (SCNs) dated 22nd October 2010 and 21st October 2011 for FY 2005-06 and FY 2006-07, respectively, be declared as non est due to the delay in adjudicating the same. The petitioner filed replies to SCN-1 on 28th June 2011 and to SCN-2 on 12th June 2013. Personal hearing for SCN-1 was granted on 5th January 2012, but no personal hearing was provided for SCN-2. Notices for personal hearing were received by the petitioner on 26th November 2020 and 11th January 2021, leading to the filing of this petition on 25th January 2021. Ad-interim relief was granted on 24th January 2022. 2. Non-Communication of Transfer of SCNs to Call Book: The respondents admitted that both SCNs were transferred to the call book on 22nd June 2012 due to the department's appeal in the Apex Court in Malabar Management Services Pvt. Ltd. However, the petitioner was not informed about this transfer. The court observed that non-communication of the transfer of SCNs to the call book is fatal to the respondents' case, relying on the judgment in Shreenathji Logistics Vs. Union of India & Ors. 2022 (11) TMI 709 (Bom) and Godrej & Boyce Mfg. Co. Ltd. Vs. Union of India 2022 (142) Taxmann.com 418 (Bombay). 3. Procedural Fairness and Principles of Natural Justice: The court emphasized that even where the statute does not prescribe a time limit for adjudication, SCNs must be adjudicated within a reasonable time. Failure to inform the petitioner about the transfer to the call book impinges on procedural fairness and violates the principles of natural justice. The court noted that the delay in adjudicating the SCNs for over a decade without informing the petitioner rendered the proceedings void. The court also highlighted that the respondents' failure to produce a copy of the circular relied upon for transferring the SCNs to the call book further weakened their case. Conclusion: The court quashed and set aside the two SCNs dated 22nd October 2010 and 21st October 2011, making the rule absolute in terms of prayer clause (a). The petition was disposed of, declaring the adjudication proceedings in relation to the impugned SCNs as not maintainable due to the inordinate delay of 9 to 10 years.
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