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TMI Blog2021 (2) TMI 910X X X X Extracts X X X X X X X X Extracts X X X X ..... tral Excise and Customs, Surat-II; (b) That this Hon'ble Court be pleased to issue writ of prohibition or any other appropriate writ in the nature of prohibition under Article 226 of the Constitution of India prohibiting the Respondents their subordinates, servant and agents from in any manner proceeding further with the adjudication of F.no.V(ch.54) 03-10/Dem/2004 dated 16.04.2004, the then Commissioner of Central Excise and Customs, Surat-II. (c) that pending the hearing and final disposal of this petition, this Hon'ble Court be pleased to restrain the Respondents by themselves, their officers, subordinates, servants and agents to refrain from acting upon or taking any further steps or proceedings in pursuance of and/or in implementation and/or in furtherance of the impugned show cause notice F.No.V/Ch.54)03=-10/Dem/2004 dated 16.04.2004, the then Commissioner of Central Excise and Customs, Surat-II. (d) An ex-parte ad-interim relief in terms of prayer (d) above may kindly be granted; (e) Such other and further order or orders as may be deemed just and proper in the facts and circumstance of the present case may kindly be granted." 2. The facts, in a capsulized form, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fter waiving pre-deposit of the amount demanded, set aside the impugned order and remanded the matter to the Commissioner for once again deciding the matter on observing the principles of natural justice, as it was of the opinion that the order passed was in breach of the principles of natural justice. Relevant finding and observations are reproduced as under: "2. The first hearing date was fixed by the Commissioner on 31.1.05. The appellant vide their letter of the same date brought it to the notice of the Commissioner that they attended the office but as Commissioner was not available, hearing could not take place. On second date of hearing fixed on 16.2.2001, the Commissioner was again not available in the office. This is clear from the letter dt.16.2.2005 written by the appellant to the Commissioner. As per the appellants notices for the next date of hearing were not received by them and as such appearance could not be caused. 3. It is also seen that though the appellant had field reply to the show cause notice vide their letter dt.21.8.04, the Commissioner observed in the impugned order that no reply has been filed by the appellant. As such, he has passed the order without ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te appearing with Mr. Dhaval Shah for the petitioner, who has fervently made his submissions and urged that there is no earthly reason as to why the show cause notice could not have been adjudicated for more than 15 years. The petitioners are not guilty of delay in adjudication, as they had replied to the show cause notice in the year 2004 itself. 11.1 He further urged that in case of Siddhi Vinayak Syntex Pvt. Ltd. vs. Union of India, 2017 (352) E.L.T.455 (Guj.), this Court has held that revival of the proceedings after along gap without any proper explanation therefor is unlawful and arbitrary. This decision has been challenged before the Apex Court where the quashment of the show cause notice has not been questioned by the Court. However, it has admitted the matter for the limited purpose of examining the circular of transferring the matter to the call book. 11.2 Learned Senior Counsel further relied on the decisions of M/s. Parimal Textiles vs. Union of India, 2018(8) G.S.T.L.361(Guj.), Alidhara Textile Engineers Ltd. & Ors. vs. Union of India, 2017 (3) GLH 306, Shivkurpa Processors Pvt. Ltd. vs. union of India, 2018 (362) E.L.T. 773 (Guj), Meghmani Organics Ltd. vs. Union of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e had been decided by the Court. It had been transferred for a regular hearing and the notice came to be issued for personal hearing in the year 2020. No explanation was tendered as to why after the year 2017, when an identical legal issue was decided, delay has been caused of three years. We had raised a query to the learned Standing Counsel appearing for the Central Government as to whether, there was any formal communication, whereby the party had been intimated of the transfer of the matter to the call book and his answer, after getting the instructions, has been in negation. He has also admitted that in a case of M/s. Parimal Textiles (supra), the very arguments had been advanced by the union and the Court had yet dealt with the matter and quashed and set aside the show cause notice on the ground that the admission in the case of Siddhi Vinayak Syntex Pvt. Ltd.(supra) was on a limited ground of challenging the circular. 13. Having thus heard both the sides extensively the short issue that deserves consideration of this Court is as to whether after the remand made by the Appellate Tribunal in the year 2005, whether initiation of proceedings in the year 2020 without putting the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Hence, such transfer to the call book of the matter and revival of the same would cause immense prejudice to the assessee. "15. The moot question that arises for consideration in the present case is, whether it was permissible for the respondents to act upon a show cause notice issued in the year 1998, after a period of seventeen years. At this juncture, it may be germane to refer to the decisions on which reliance has been placed by the learned counsel for the petitioner. 16. The decision of the Bombay High Court in the case of Shirish Harshavadan Shah v. Deputy Director, Enforcement Directorate, Mumbai (supra), was relied upon wherein in the facts of the said case for a period of almost twelve years, no steps had been taken by the respondents therein to proceed with the adjudication proceedings. The court held that no fault could be attributed to the petitioners for this delay and inaction on the part of the respondents; the respondents had not alleged any malice on the part of the petitioners nor was it the case of the respondents that the petitioners therein were responsible for the delay in the proceedings. The court found no justification in the explanation tendered for c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Circular No.162/73/95-CX dated 14.12.1995 issued by the CBEC. Insofar as the power of the CBEC to issue instructions to the authorities under the Central Excise Act are concerned, the same are relatable to the provisions of section 37B of the Act, which read thus:- "37-B. Instructions to Central Excise Officers-The Central Board of Excise and Customs constituted under the Central Boards of Revenue Act, 1963 (54 of 1963), may, if it considers it necessary or expedient so to do for the purpose of uniformity in the classification of excisable goods or with respect to levy of duties of excise on such goods or for the implementation of any other provision of this Act, issue such orders, instructions and directions to the Central Excise Officers as it may deem fit, and such officers and all other persons employed in the execution of this Act shall observe and follow such orders, instructions and directions of the said Board: Provided that no such orders, instructions or directions shall be issued- (a) so as to require any Central Excise Officer to make a particular assessment or to dispose of a particular case in a particular manner: or (b) so as to interfere with the disc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... decides the same is a quasi-judicial authority. Such proceedings are strictly governed by the statutory provisions. Section 11A of the Act as it stood at the relevant time when the show cause notice came to be issued, provided for issuance of notice within six months from the relevant date in ordinary cases and within five years in case where the extended period of limitation is invoked. Section 11A thereafter has been amended from time to time and in the year 2011, various amendments came to be made in the section including insertion of subsection (11) which provides that the Central Excise Officer shall determine the amount of duty of excise under subsection (10) - (a) within six months from the date of notice where it is possible to do so, in respect of cases falling under subsection (1); (b) within one year from the date of notice, where it is possible to do so, in respect of cases falling under subsection (4) or sub-section (5). 24. Thus, with effect from the 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 au ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se Act nor rule 31 of the rules, envisage issuance of such directions. The concept of call book is, therefore, contrary to the provisions of the Central Excise Act and such instructions are beyond the scope of the authority of the CBEC. Transferring matters to the call book being contrary to the provisions of law, the explanation put forth by the respondents for the delay in concluding the proceedings pursuant to the show cause notice 3.8.1998 cannot be said to be a plausible explanation for not adjudicating upon the show cause notice within a reasonable time. In view of the settled legal position, as propounded by various High Courts, with which this court is in full agreement, the revival of proceedings after a long gap of ten to fifteen years without disclosing any reason for the delay, would be unlawful and arbitrary and would vitiate the entire proceedings. 25. Examining the matter from another angle, it is the stand of the respondents that the matter 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 dec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... after a long delay of 13 years. This also, by following the decision of Siddhi Vinayak Syntex Pvt. Ltd.(supra) was allowed quashing the notice and setting aside the order of the concerned officer. 15 It would be worthwhile to consider the decision of M/s. Parimal Textiles (supra), where this court had examined the very issue and followed the decision of Siddhi Vinayak Syntex Pvt. Ltd. (supra). It also had considered the submissions of admission of the very matter before the Apex Court and held thus: "6. Under similar circumstances, one of the entities Siddhi Vinayak Syntex Pvt Ltd. had approached this Court and asked for similar relief. Division Bench of this Court by a judgement dated 7.3.2017 in Special Civil Application No.19437/2016 allowed the petition making the following observations : "23. Insofar as the show cause notice in the instant case is concerned, the same has been issued under section 11A of the Act. Proceedings under section 11A of the Act are adjudicatory proceedings and the authority which decides the same is a quasi judicial authority. Such proceedings are strictly governed by the statutory provisions. Section 11A of the Act as it stood at the relevant ti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r years together, it is not on account of it not being possible for the authority to decide the case, but on grounds which are extraneous to the proceedings. In the opinion of this court, when the legislature in its wisdom has prescribed a particular time limit, the CBEC has no power or authority to extend such time limit for years on end merely to await a decision in another case. The adjudicatory authority is required to decide each case as it comes, unless restrained by an order of a higher forum. This court is of the view that the concept of call book created by the CBEC, which provides for transferring pending cases to the call book, is contrary to the statutory mandate, namely, that the adjudicating authority is required to determine the duty within the time frame specified by the legislature as far as possible. Moreover, as discussed hereinabove, there is no power vested in the CBEC to issue such instructions under any statutory provision, inasmuch as, neither section 37B of the Central Excise Act nor rule 31 of the rules, envisage issuance of such directions. The concept of call book is, therefore, contrary to the provisions of the Central Excise Act and such instructions a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ut bringing it to the notice of the petitioner that the case was transferred to the call book and was therefore pending, causes immense prejudice to the petitioner. The revival of the proceedings, therefore, is in complete breach of the principles of natural justice and hence, the impugned show cause notice and the order in original passed pursuant thereto, cannot be sustained. 27. For the foregoing reasons, the petition succeeds and is, accordingly, allowed. The impugned Order in original No.AHMEXCUS0030401516 dated 11.3.2016 as well as the Show Cause Notice F.No.V.54/1529/ OA/98 dated 3.8.1998 are hereby quashed and set aside. Rule is made absolute with no order as to costs." 7. We are informed that the department carried the issues before the Supreme Court. The Supreme Court has however entertained the department's appeal to the limited extent of deciding whether circular issued by CBEC providing that the proceedings be kept in call book is in conformity with the provisions of section 37B of the Central Excise Act. It can thus be seen that the judgement of the High Court rendered in identical facts is not disturbed by the Supreme Court insofar as its main impact on quashing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n order was formally passed and handed over to the petitioner. The petitioner cannot be aware whether any order was formally signed by the person who heard the adjudication proceedings. All that the petitioner could say was that a hearing had taken place but that he had not received the formal order. It is for the department to keep records of its adjudication proceedings. No explanation is forthcoming from the department as to why adjudication proceedings were not held for 11 years since that is the department's case. 6. It is true that no period of limitation has been prescribed for such adjudication. It follows also that the adjudication proceedings cannot be held twice over. The petitioner has averred that the adjudication proceedings took place at New Delhi and that is the position, which it would be reasonable to accept because of long lapse of time. The petitioner has also pointed out that certain directions were given to the Reserve Bank of India for lifting the earlier ban. It was open to the department to enquire from the Reserve Bank of India which also is a government concern as to what were the directions given to it earlier and subsequently for lifting the ban. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the above, particularly as in this case, long delay has result in papers being misplaced. The reasonable period may vary for case to case. However, when the notices are being kept in abeyance (by keeping them in the call book as in this case), the Revenue should keep the parties informed of the same. This serves two fold purpose-One it puts the party to notice that the show cause notice is still alive and is only kpet in abeyance. Therefore, the party can then safeguard its evidence, till the show cause notice is taken up for adjudication. Secondly, if the notices are being kept in the call book for some reason, the party gets an opportunity to point out to the Revenue that the reasons for keeping it in call book are not correct and the notices could be adjudicated upon immediately. This is the transparent manner in which the State administration must function. 10. In fact, we note that the above manner of functioning is the objective of the State administration, as our attention has been drawn to the C.B.E & C Circular No.1053/2017-CX dated 10.03.2017. In paragraph 9.4 of the circular of C.B.E & C. has directed the officers of the department to formally communicate to the part ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... waived the pre-deposit of the amount demanded and set aside the impugned order and remanded the matter to the Commissioner for once again deciding by clearly holding that it was in breach of the principles of natural justice. 20. The transfer to the call book was on the ground that there was yet another matter on the very legal issue, which was pending before this Court, being Special Civil Application No. 537 of 2007, which came to be decided by this Court in the year 2017. However, from 26.06.2006 till the issuance of notice in the month of November, 2020, at no stage, there had been any intimation given to the petitioner on the part of the respondent. Least that could be expected from the authorities, more particularly, in wake of the circular of CBEC Circular No.1053/2/2017-CX dated 10.03.2017 as provided in paragraphs 9.4 of the said circular is to formally communicate to the party about transferring the matter to the call book, as held by the Apex Court. Even without such circular also, it is expected of the authorities that it cannot, on its own, place the matter in a call book without the assessee knowing as to what was happening at the end of the authorities. Transparenc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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