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TMI Blog2022 (11) TMI 1393X X X X Extracts X X X X X X X X Extracts X X X X ..... of six months was elastic and admitted of some flexibility, the excess of time, over and above six months must be justifiable and reasonable. As to whether the phrase under sub-section (11) being 'where it is possible to do so' would stand justified by the sequence of events that have been noted in the matter, the categoric conclusion is that it does not. There are admittedly, absolutely no circumstances warranting or justifying the pendency of the SCNs on the call book for 21 long years. The Gujarat High Court in the case of SIDDHI VINAYAK SYNTEX PVT LTD. VERSUS VERSUS UNION OF INDIA 2 [ 2017 (3) TMI 1534 - GUJARAT HIGH COURT ], considered the case of delay ranging up to 15 years in that case and had set aside all SCNs as being unreasonably and unduly belated. The Bench has also expressed the view that the concept of the call book, created by the Central Board of Excise and Customs, and transfer of pending cases to the call book, is contrary to the statutory mandate. Such transfer provides for an extrastatutory period of limitation, impermissible and contrary to law. The SCNs in the present case have been issued in 2001 and there has been areference to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roposals contained therein. Personal hearing notices were issued, very proximate to the date of SCNs, and the exchange of information continued for a brief period. 5. As regards show cause notice assailed in WP.No.17204 of 2020 dated 15.02.1999, there was investigation by the audit wing of the Central Excise Department that was of the view that the Assessing Officer ought to have enhanced the proposal contained in the SCN and that the demand of Rs.21.7 lakhs (approx) that was proposed, fell short of the appropriate demand that ought to have been Rs.28.1 lakhs (approx) instead. 6. As far as the other SCNs are concerned, the officer was convinced with the responses filed by the petitioner and did not pursue the same. Audit objections were thereafter raised in respect of all SCNs, the first on the ground of shortfall in demand raised in SCN dated 15.02.1999, and the remaining five, on the ground that the dropping of proceedings was incorrect and ought to have been pursued. 7. The present writ petitions had come up for hearing before this Court on 15.11.2022 and both learned counsel were heard. Upon ascertaining that the issue pertained to the bar of limitation, it became clea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... equired for 184 MTs is 235.900 MTs. Therefore, it is incorrect to say that the assessee has not ***** credit for 51 MTs of finished products lying in RG-1 ***** as on 2.6.1998. **** is stated by audit that the assessee has paid 8% of the value **** exempted product at the time of clearance. This is not ****. The assessee proposed to pay 8% vide their letter ro.FA-****** dated 29.6.1998 for which a communication was sent to SSP **** Range vide letter OC No.494/98 dated 29.7.1998 that the ***** taken is irregular and advised SSP to reverse the same and *** separate inventory of the inputs. ****, it has also been stated by the audit that the **** of Central Excise, SSP in SCN OC 110.582/98 dated ****.11.1998 has raised a demand for Rs. 21,70,366/- for the **** availed MODVAT Credit by SSP, Salem and when the entire **** have been reviewed by audit, it was found that ****** is still a short demand to the extent of Rs. 28,11,977/-. ***** perusal of the manner or calculation to arrive at the above sum **** Rs. 28,11,977/-, it is seen that the audit has, by oversight, assumed a norm of 1.865 MTs for manufacture of 1 MTs of Coin *** Blanks. This is incorrect. The correct norm for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iz., Hot Rolled Stainless Steel Coils. As the exemption for captive consumption (notification No.67/95-**** dated 16.3.1995) is not available for manufacture of exempted final products supplied to the above category of pump manufacturers. SSP was asked to pay excise duty on the input Hot Rolled Stainless Steel coils at the rate of 15%. They simultaneously availed MODVAT Credit to the extent of 95% of such duty paid. On perusal of Rule 57CC(1) of Central Excise Rules, it is seen that Where a manufacturer is engaged in the manufacture of any final product which is chargeable to duty as well as any other (final product which is exempted from the whole of duty of excise leviable thereon or is chargeable to Nil rate of duty) and the manufacturer takes credit of the specified duty on any inputs (other than inputs used as fuel) which is used or ordinarily used in or in relation to the manufacture of both the aforesaid categories of final products, whether directly or indirectly and whether contained in the said final products or not, the manufacturer shall, unless the provisions of sub-rule (9) are complied with, pay an amount equal to 8% of the price of the second category of fina ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at when the manufacturer clears the fully exempted final product, he is required to reverse the credit taken on the inputs contained in the exempted final product. This procedure is quite cumbersome and many a time, in the absence of any input-output correlation, it is difficult to determine whether the reversal of credit has been correct or not. In order to circumvent this problem, a provision has been made by inserting a new rule 57CC..... . Normally, an exemption notification is given to any category of assesses only to provide certain benefits to motivate them towards fostering industrial development. Therefore, interpretation of the notification should be viewed from the proper perspective and also keeping in view the intention of the legislature. This has been held so in many appellate decisions. Therefore, a broader view is to be adopted while interpreting such notifications. In the light of the above discussion, it is requested that this aspect may be viewed from the proper perspective and further proceedings on this issue may be dropped. 11. While it is crystal clear that the Assessing Authorities had defended the stand taken by them, since both practice as well ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have been raised by the Assessing Authorities concerned, to the objections raised by audit. It is the case of the revenue that since the present cases falls under category (iv) above, the transfer of the SCNs to the call book is justified. 17. I agree with the revenue in this regard. It is necessary that the cases be transferred to call book to ensure that the SFV is completed and a stand be taken as to whether the position adopted by the Assessing Authority or that directed by the Audit Department must be pursued. 18. However, such reference cannot be exploited as a methodology to protract proceedings unlimitedly. Reference to call book was only to provide some elbow room to various branches of the Department to come to a consensus on whether, and in what manner, proceedings are to be pursued. It does not grant unbridled license to the revenue to keep matters pending forever and anon, as they have done in the present case. 19. In cases falling under categories (i), (ii) and (iv) of Circular dated 14.12.1995, where appeals are pending before the appropriate authorities and cases where injunctions have been granted either by the CEGAT, High Court or the Supreme Court as we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion Ltd. [2007 (217) E.L.T. 325 (S.C.)] and Government of India Vs. Citedal Fine Pharmaceuticals [1989 (42) E.L.T. 515 (S.C.)] 25. The ratio of the aforementioned judgements have been applied by various High Courts that have adopted the same view. (See: J.M.Baxi Co. Vs. Government of India [2016 (336) E.L.T. 285 (Mad.)]; Tablets (India) Ltd. Vs. Assistant Commissioner, Chennai [2018 (11) G.S.T.L. 162 (Mad.)]; Sunder System Pvt. Ltd. Vs. Union of India [2020 (33) G.S.T.L. 621 (Del.)]; Reliance Industries Ltd. Vs. Union of India [2019 (368) E.L.T. 854 (Bom.)]; Shirish Harshavadan Shah Vs. Deputy Director, E.D., Mumbai [2010 (254) E.L.T. 259 (Bom.)]; Transworld Shipping Services Pvt. Ltd. Vs. Government of India [2018 (361) E.L.T. 176 (Mad.)]; Cambata Indus. Pvt. Ltd. Vs. Additional Dir. of Enforcement, Mumbai [2010 (254) E.L.T. 269 (Bom.)] and Lanvin Synthetics Private Ltd. Vs. Union of India [2015 (322) E.L.T. 429 (Bom.)]. 26. Learned Senior Standing Counsel relies on a judgment of the Hon'ble Supreme Court in the case of Collector of Central Excise Vs. Bhagsons Paint Industry (India), [(2003) 158 ELT 129 S.C.]. The judgement is short and reads thus: The Tribunal in a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5, which provides for transfer of cases to the call book is in conformity with the provisions of Section 37B of the Central Excise Act, 1944 read with the relevant Rules. Significantly, the Hon'ble Supreme Court has not thought it fit to intervene in the order passed by the High Court setting aside the adjudication proceedings. 31. A subsequent development is captured in Circular No. 1053/2/2017-CX dated 10.03.2017 issued in relation to 'show cause notice, adjudication proceedings, closure of proceedings and recovery of duty', rescinding the 1989 Circular and streamlining the procedure for reference to be made to the call book. 32. Conspicuous is the deletion of cases relating to contested audit objections, in the category of cases that may be referred to call book. Para 9.3 of the Master Circular, that deals with call-book cases now reads as follows: 9.3 Call-Book Cases: A call book of cases is maintained of such cases which cannot be adjudicated immediately due to certain specified reasons and adjudication is to be kept in abeyance. The following categories of cases can be transferred to call book:- i. Case in which the Department has gone in appeal to t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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