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TMI Blog2019 (7) TMI 1409X X X X Extracts X X X X X X X X Extracts X X X X ..... ( PER : HONOURABLE MR.JUSTICE J.B.PARDIWALA) 1. Rule returnable forthwith. Mr. Nirzar Desai, the learned standing counsel waives service of notice of rule for and on behalf of the respondents. 2. By this writ-application under Article226 of the Constitution of India, the writ-applicants have prayed for the following reliefs: - 15 (A) be pleased to issue a writ of certiorari or any other appropriate writ, direction or order, quashing and setting aside OIA No.VAD-EXCUS-002-APP-448-2018-19 dated 29.10.2018 (Annexure H ); ( B) be pleased to issue a writ of prohibition or any other appropriate writ, direction or order, completely and permanently prohibiting the respondents, their servants and agents from taking any action against the petitioner in pursuance of Show Cause Notice F.No.V.(Ch.32)0303/ Dem/2005 dated 28.6.2005 (Annexure C ) and OIA No.VAD-EXCUS-002-APP-448-2018-19 dated 29.10.2018 (Annexure H ); ( C) pending hearing and final disposal of the present petition, be pleased to restrain the respondent, their servants and agents from taking any action against t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Salt is classified under S.H.No.2920.10 of the Central Excise Tariff. Among other goods, SAPT Salt is also sold in DTA by the petitioner. 3.4 Pursuant to the application of the petitioner, the office of the Development Commissioner granted permission vide letter No.KASEZ/ 100%EOU/II/03/0203 Surat/2310 dated 4.10.2004 to sell in DTA the goods specified under the said permission letter, because the petitioner has achieved positive NFE for the concerned period. 3.5 However, a Show Cause Notice F.No.V(Ch.32)0303/ Dem/2005 dated 28.6.2005 was served upon the petitioner thereby proposing to recover differential excise duty aggregating to ₹ 20,76,833/for the above referred DTA clearances, and also customs duty aggregating to ₹ 35,87,591/for the imported raw materials used by the petitioner in relation to manufacture of the above referred five consignments of SAPT salt sold in DTA. Other proposals for recovering interest on the above amounts, imposing penalty on the petitioner and confiscating 48,000 Kgs. Of the above goods sold in DTA were also levelled in this show cause notice dated 28.6.2005. 3.6 The petitioner filed a r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... respondent herein heard the appeal on 26.10.2018 when the petitioner's advocates appeared and submitted a note with copies of judgments and orders of this Hon'ble Court in cases like Siddhi Vinayak Syntex Pvt. Lts. (supra), Alidhara Textile Engineers (supra), Piramal Textiles (supra) and Suraj Karan Baradia being Special CA No.7143/2018. 3.9 But, the Commissioner (Appeals) has now rejected the appeal without even referring to the judgments of this Hon'ble Court and the principle of law flowing therefrom, though brought to his notice by the petitioners in the appeal proceedings. The 2nd respondent has made an OIA No.VAD-EXCUS-002-APP-448-2018-19 dated 29.10.2018 recording therein the petitioner's submission that delay of 13 years in deciding the show cause notice resulted in violation of principles of natural justice and also that an additional note of submissions was filed by the petitioner's advocates during personal hearing of the appeal, but without considering this submission and the case law relied upon in support thereof. The Commissioner (Appeals) has passed the order thereby confirming all the liabilities fastened upon the petitioner b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d contrary to the law laid down by this Hon'ble Court; and this order also suffers of gross violation of principles of natural justice. The petitioner is therefore constrained to approach this Hon'ble Court invoking its extraordinary jurisdiction under Article 226 of the Constitution of India against such unauthorized and illegal action of the 2nd respondent herein. 3.12 The petitioner submits that revival of proceedings after more than 13 years was an exfacie illegal and invalid action, and therefore the respondents cannot be allowed to reopen the proceedings at such a belated stage. There is no fault on part of the petitioner in this delay of more than 13 years, and it is not because of any malafide or malice on part of the petitioner that the respondent authorities could not complete adjudication of the show cause notice dated 28.06.2005 for 13 years; and therefore allowing the respondents to revive and reopen such stale proceedings at this stage would not be in the interest of justice, nor permissible in law. A serious and grave prejudice is cause to the petitioner since the respondents have not completed the adjudication during inter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ings do not culminate in adjudication order within a reasonable time, a long unexplained delay would vitiate the proceedings; and such delay also results in relevant documents being lost and misplaced as regards the assessee thereby causing prejudice. The Hon'ble Bombay High Court has held in various cases like Hindustan Lever Ltd. Vs. UOI 2011 (264) ELT 173 (Bom.), Shirish Harshvadhan Shah 2010 (254) ELT 259 (Bom.) Lanvin Synthetics Pvt. Ltd. Vs. UOI 2015 (322) ELT 429 (Bom.) Cambata Industries Pvt. Ltd. 2010 (254) ELT 269 (Bom.) etc. that delay in adjudication of a show cause notice was fatal for survival of the proceedings, more so when no proper or justifiable reason was also disclosed by the Authority for the delay in completing adjudication and revival of the proceedings after several years. The Hon'ble Delhi High Court has also held in cases like R.M. Mehrotra Vs. Enforcement Directorate 2009 (246) ELT 141 (Del.) that revival of show cause notice proceedings after ten years without disclosing reason for delay was unlawful and arbitrary; and the action of revival of proceedings was liable to be struck down. However, the delay in adjudication of the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the 2nd respondent in the impugned order; but however, for want of relevant documents and witnesses including the experts who could render the reports/opinions about the goods involved, the petitioner is not in a position to effectively explain the case made out against them by the respondent. The present petition is filed before this Hon'ble Court not for challenging the impugned decision of the respondents on merits, but on the grounds of violation of principles of natural justice, and revival of adjudication proceedings after keeping it dormant for 13 years; and therefore while denying and disputing the allegations in the show cause notice and conclusions recorded in the adjudication order as well as the impugned appellate order, the petitioner does not deal with such allegations and conclusions elaborately in this proceedings. However, if need be, the extracts of the grounds before the Commissioner (Appeals) and the reply dated 21.11.2005 submitted before the adjudicating authority may be considered for examining the invalidity and the merit of the case made out by the respondents against the petitioner herein. 4. Mr. Paresh Dave, the learned counsel ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thout any objection or complaint as regards the delay; they could be said to have submitted to the jurisdiction of the adjudicating authority without any objection. In such circumstances, according to Mr. Desai, the writ-applicants could not have raised such an issue before the appellate authority. According to Mr. Desai, the respondent original authority was not obliged to look into the aspect of delay. Mr. Desai submitted that although there is a decision of this Court in the case of M/s. Siddhi Vinayak (supra) that the delay would vitiate the final proceedings, yet the issue is at large before the Supreme Court. According to Mr. Desai, there cannot be any straightjacket formula that once there is a delay in the adjudication after the issue of showcause notice, the proceedings would stand vitiated. Mr. Desai invited the attention of this Court to the affidavit-in-reply filed on behalf of the respondents duly affirmed by Dr. Ashir Tyagi, Commissioner of Central GST and Central Excise, Vadodara-II Commissionerate. Mr. Desai placed reliance on paragraphs13 and 14 for the purpose of explaining the delay. 13. Further, on similar issue where the duty demanded on fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r AnnexureA to the SCN dated 28.06.2005) under Section11A( I) of C.Ex. Act, 1944; and I order for its recovery from M/s. Meghmani Organic Ltd., UnitII Plot No.21, 21/1, GIDC Industrial Estate, GIDC, Panoli, (100% EOU). ( ii) I drop the demand of Central Excise Duty/ Customs duty amounting to ₹ 35,87,591/demanded on raw materials imported and warehoused and were subsequently consumed in the manufacture of finished goods and cleared in DTA, from M/s. Meghmani Organics Ltd., UnitII Plot No.21, 21/1, GIDC Industrial Estate, GIDC, Panoli, (100% EOU). ( iii) I impose penlaty of 20,76,833/( Rupees Twenty Lakh Seventy Six Thousand Eight Hundred Thirty three Only), on M/s. Meghmani Organics Ltd., UnitII Plot No.21, 21/1, GIDC Industrial Estate, GIDC, Panoli, (100% EOU) under Rule 25 of Central Excise Rules, 2002. ( iv) I do not impose penalty on them under Section 72 read with Section 112(a) of Customs Act, 1962 on M/s. Meghmani Organics Ltd., UnitII Plot No.21, 21/1, GIDC Industrial Estate, GIDC, Panoli, (100% EOU). ( v) I order to recover interest a applicable rate on the amount mentioned at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... including the above aspects which were not the subject matter before the respective judicial forums in those relied upon cases. Therefore, I hold that they are liable for the penal action under Rule 25 of Central Excise Rules 2002. The appellant are also liable to pay interest under erstwhile Section 11AB/AA of the Central Excise Act, 1944. 12. The factual position is as under:Page Particulars Date ( 1) Show-cause notice 28/06/2005 ( 2) Reply by the writ-applicant 21/11/2005 ( 3) Impugned Order 27/12/2017 13 . In our opinion, the issue is squarely covered by the decision of this Court in the case of M/s. Siddhi Vinayak (supra) . M/s. Siddhi Vinayak (supra). It also takes care of the objection raised on behalf of the respondents as regards the alternative remedy of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion is not maintainable does not merit acceptance. 14 Adverting to the merits of the case, as can be seen from the impugned order, the same is totally silent as regards why the matter was kept pending from the year 2000 to November 2015 when notices for personal hearing came to be issued. In the affidavit-in-reply, the stand adopted by the respondents is that in view of the fact that a similar issue in the case of M/s. Siddharth Petro Products Limited and others, was pending consideration by the Appellate Tribunal, the matter was transferred to the call book on 23.03.2000, and it is only after the said case was decided by the Appellate Tribunal by an order dated 10.06.2013, that the show cause notice was retrieved from the call book on 26.04.2014, that is, after a period of more than ten months. Subsequently, after a further period of one and a half year, notices for personal hearing came to be issued, whereby personal hearing was fixed on 13.11.2015, 16.11.2015, 17.11.2015, 27.11.2015 and 25.01.2016, after which, the matter was decided ex parte by the impugned order dated 11.03.2016. From the dates fixed for personal hearing, it is evident that insofar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... old matters in this manner and if the department's contention as to limitation were to be accepted, it would mean that the department can commence adjudication proceedings twenty years, twenty five years or thirty years after the original show cause notice, which cannot be permitted. 17 In Hindustan Lever Limited v. Union of India (supra), the Bombay High Court held that the extent of delay which had occurred in adjudication upon the issues was also relevant. The court observed that it was wellsettled that the adjudication proceedings have to be culminated within a reasonable time and if it is not done so, they stand vitiated on the said ground. The court observed that, normally for compliance of the principles of natural justice it would have remanded the matter back to the concerned authority. However, considering the time lag that has elapsed from the date of first hearing granted to the petitioner, since there had been undue delay in deciding the said proceedings, it did not deem it fit to remand the matter to the concerned authority of the respondents. The court, accordingly, set aside the impugned order. 18 In R. M. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er: or ( b) so as to interfere with the discretion of the Commissioner of Central Excise (Appeals) in the exercise of his appellate functions. 21 Thus, under section 37B of the Act, the Central Board of Excise and Customs is empowered to issue instructions to Central Excise Officers if it considers it necessary or expedient to do so firstly, for the purpose of uniformity in the classification of excisable goods; secondly with respect to levy of duties of excise on such goods; and thirdly, for the implementation of any other provision of the Act. Insofar as the concept of call book is concerned, the same evidently does not relate to uniformity in the classification of excisable goods, or to levy of duties of excise of such goods. Insofar as the implementation of any other provision of this Act is concerned, the concept of call book, cannot be traced to any other provision of the Act nor does it appear to be relatable to the implementation of any other provision of the Act. Evidently, therefore, the circular dated 14.12.1995, cannot be said to have been issued in exercise of powers under section 37B of the Act. 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... year 2011 a time limit has been prescribed for determining the amount of duty of excise where it is possible. It cannot be gainsaid that when the legislature prescribes a time limit, it is incumbent upon the authority to abide by the same. While it is true that the legislature has provided for such abiding by the time limit where it is possible to do so, subsection (11) of section 11A of the Act gives an indication as to the legislative intent, namely that as far as may be possible the amount of duty should be determined within the above time frame, viz. six months from the date of the notice in respect of cases falling under subsection (1) and one year from the date of the notice in respect of cases falling under subsection (4) or subsection (5) . When the legislature has used the expression where it is possible to do so , it means that if in the ordinary course it is possible to determine the amount of duty within the specified time frame, it should be so done. The legislature has wisely not prescribed a time limit and has specified such time limit where it is possible to do so, for the reason that the adjudicating authority for several reasons may not be in a position to decide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r was kept in the call book for all these years to await the outcome of a similar case in the case of M/s. Siddharth Petro Products Limited and others, which was pending before the Appellate Tribunal. In such a situation, the decision in the case of the petitioner should be governed by the decision of the Appellate Tribunal. However, the respondents after keeping the matter in the call book for fifteen years, have thereafter chosen not to follow the outcome of the other matter wherein the show cause notice had been dropped by the adjudicating authority, and the Appellate Tribunal had dismissed the appeal, albeit on grounds other than on merits. 26 Moreover, as is evident from the facts noted hereinabove, the respondents while consigning the matter to the call book did not deem it fit to inform the petitioner about it. Since in other cases, such proceedings had been dropped, the petitioner had reason to form a bona fide belief that the proceedings in its case had also been dropped. During the interregnum the petitioner's position has changed considerably. In view of the fact that the factory of the petitioner company has been closed down and sold, it ..... X X X X Extracts X X X X X X X X Extracts X X X X
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