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TMI Blog2023 (1) TMI 743X X X X Extracts X X X X X X X X Extracts X X X X ..... t have the unfettered right to choose a time to conclude the said proceedings as per their own whims and fancies. Action on the part of a constituent of State has to be with responsibility and not caprice - The words reasonable period call for a flexible rather than a rigid construction having regard to the facts of each case, but the period in excess of eleven years as claimed by the Petitioner or even seven years, if we were to consider the period from 8 May 2013, when the Petitioner informed the Respondent Authority that it had obtained Centralized Registration, without the Respondents sufficiently explaining as to what prevented them from concluding the proceedings except their own delay, in our view is nothing but unreasonable and the reasons stated in the affidavit-in-reply cannot be accepted. Respondents having delayed the transfer of proceedings from Delhi to Mumbai and not even having bothered to themselves do the same upon the Centralized Registration by the Petitioner on 9 September 2010 and even after the Petitioner informed of the same on 8 May 2013, without any satisfactory explanation for this delay, adjudication of the Show Cause cum Demand Notice No.59 of 2009 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... igher Education Cess amounting to Rs. 81,580/-, as detailed in para 4 of the show cause notice, should not be demanded under Section 66, 67 and 68 of the Act and Rule 6 of the Rules and recovered by invoking extended period of limitation as provided under proviso to sub-section (1) of Section 73 of the Act. (iii) Service tax amounting to Rs. 41,83,916/-; Education Cess and Secondary Higher Education Cess amounting to Rs. 54,721/-, as detailed in para 5 of the show cause notice, should not be demanded under Section 66, 67 and 68 of the Act and Rule 6 of the Rules read with Rule 2(1)(d)(iv) of the Rules and recovered from the Petitioner by invoking extended period of limitation as provided under proviso to sub-section (1) of Section 73 of the Act. (iv) The interest should not be charged and recovered from the Petitioner under Section 75 of the Act. (v) Penalty in terms of Section 76 of the Act should not be imposed upon the Petitioner for failure to pay Service tax as and when this payment became due. (vi) Penalty in terms of Section 77(2) of the Act should not be imposed upon the Petitioner for not fling proper return read with Section 70 of the Act; and (vi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to vide emails dated 6 August 2020, 23 August 2020 and 8 September 2020 wherein Respondent No.2 was informed that due to substantial lapse of time from the issuance of the show cause cum demand notice and change in management as well as office, there were significant challenges faced by the Petitioner in collating the relevant documents in support of its contention, and therefore, the Petitioner was in the process of seeking legal advice. Further, on account of the Covid-19 pandemic, most of its employees and staff were working from home and therefore adjournment was requested for by the Petitioner vide the said reply emails. 10. Thereafter, once again, vide letter bearing No. F.No.V-Adj/CGST-NM/APL/ST/15-93/2017-18 dated 9 September 2020, the hearing of the subject show cause cum demand notice was scheduled before the Respondent No.2 on 24 September 2020. 11. Mr. Paranjape would submit that the above notice of hearing was issued around eleven years after the date of the said show cause cum demand notice and failure to adjudicate despite the inordinate delay has rendered the entire proceedings ex-facie invalid, illegal, untenable and unsustainable in law. 12. The learned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Delhi Office of the Petitioner and which was acknowledged by the Petitioner. The learned Senior Counsel would also submit that, not only that, the Petitioner has, admittedly, filed a reply dated 30 December 2009 to the said show cause cum demand notice. He submits that it is only vide letter dated 8 May 2013 that the Petitioner informed the Commissioner of Central Excise, Delhi, that it had obtained centralized registration under the jurisdiction of the Respondent No.2 and requested for transfer of the case files to the Respondent No.2. 16. Learned Senior Counsel, submits that the adjudication files relating to the Petitioner were received on 24 January 2019 after which the personal hearing letters dated 3 August 2020, 10 August 2020, 24 August 2020 and 9 September 2020 were issued to the Petitioner. However, Petitioner did not attend any personal hearings and sought adjournments vide emails dated 6 August 2020, 23 August 2020 and 8 September 2020 of the hearings which were scheduled on 7 August 2020, 8 September 2020 and 24 September 2020 at the office of the CGST, Navi Mumbai. 17. Learned Senior Counsel submits that previously after the issuance of the subject show cause ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, even the Petitioner had, vide letter dated 8 May 2013, informed the Commissioner of Central Excise, Delhi-III that it had obtained Centralized registration under the jurisdiction of Respondent No.2 and requested to transfer the case files to Respondent No.2. But, despite all this, no steps were taken to transfer the files or to adjudicate the subject show cause cum demand notice for several years. 22. Further, although notices of hearing were issued to the Petitioner before its merger with CMA-CGM Agencies (India) Pvt. Ltd. on 15 November 2017 but no adjudication order was passed. It was only after the files relating to the Petitioner were received by the Respondent No.2 on 24 January 2019, that the Respondents woke up from their deep slumber to issue notices of personal hearing to the Petitioner dated 3 August 2020, 10 August 2020, 24 August 2020 and 9 September 2020. 23. It is also pertinent to note that when, vide order dated 15 November 2017 of the National Company Law Tribunal, APL (India) Pvt. Ltd. merged with CMA-CGM Agencies (India) Pvt. Ltd. , there was a change in the management, staff and office of the Petitioner company, which is not disputed by the Responde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... We agree with the decision in Parle International Limited (supra) to the extent it lays down the law that the proceedings should be concluded within a reasonable period and that proceedings that are not concluded within a reasonable period, which the Court on the facts of each case has to consider, may not be allowed to be proceeded with further. On facts and in the circumstances, we are satisfied that the proceedings arising out of the impugned show-cause notice having remained dormant for about fourteen years since hearing was given to the petitioners, it should not be allowed to be carried forward further in the absence of a satisfactory explanation. 26. In the facts of this case as well, the Respondents have not acted in the manner as required by law. True that, while the Respondents right in law to initiate proceedings for violation of the provisions of the Act can never by disputed, at the same time, they do not have the unfettered right to choose a time to conclude the said proceedings as per their own whims and fancies. Action on the part of a constituent of State has to be with responsibility and not caprice. The words reasonable period call for a flexible rather t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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