2017 (12) TMI 819 - HC - Central Excise

Clandestine removal - proceedings kept in abeyance - call book - Held that - the long passage of time without any action on part of the department would not be justified making it difficult for the assessee to defend their position - after reactivating the dormant show-cause notices proceedings, the petitioners had full information that the department was proceeding with the said notices also. However, this would not be vital since all other material aspects are common. In the result, impugned order dated 28.02.2017 in connection with the show cause notices dated 15.01.2003 and 28.02.2003 is set aside. Principles of Natural Justice - adjudication of the issue - SCN dated 07.06.2007 - Held that - Though the petitioners have applied for cross-examination of such witness admittedly, the same was not granted. This consideration is also therefore being tainted with breach of natural justice. The impugned order vis-a-vis the show-cause notice dated 07.06.2007 is, therefore, set aside on this limited ground and proceedings are remanded to the adjudicating authority for fresh consideration. Petition allowed in part and part matter on remand.

Summary

Issues:
Challenge to order-in-original dated 28.02.2017; Reactivation of dormant show-cause notices after years; Breach of natural justice due to lack of cross-examination.

Analysis:
1. The petitioners challenged an order-in-original dated 28.02.2017 concerning show-cause notices from 2003 and 2007. The main issue was the reactivation of dormant notices after years, specifically the 2003 notices, without providing reasons for the delay. The Court cited a previous judgment criticizing such delays, emphasizing the importance of deciding cases within specified time frames to prevent unjust delays. The Court highlighted that keeping cases in abeyance for extended periods without valid reasons violates principles of natural justice and statutory provisions, leading to unlawful and arbitrary proceedings.

2. Regarding the adjudication of the 2007 show-cause notice, the petitioners raised concerns about the reliance on witness statements without granting cross-examination, breaching natural justice. The Court acknowledged the importance of cross-examination for a fair process and found the reliance on untested statements to be unjust. Consequently, the Court set aside the order related to the 2007 notice due to this breach of natural justice and remanded the proceedings for a fresh consideration, emphasizing the need for cross-examination before relying on witness statements in the future.

3. The Court differentiated between the issues related to the 2003 notices and the 2007 notice, setting aside the order for the former due to procedural irregularities in reactivating dormant notices and for the latter due to the lack of cross-examination. The judgment highlighted the significance of adherence to statutory provisions, timely adjudication, and upholding principles of natural justice in administrative proceedings. The Court's decision aimed to ensure a fair and transparent process for the petitioners, emphasizing the need for proper procedures and considerations in such cases to protect the rights of the parties involved.