9911796707
TMI Blog2024 (12) TMI 269X X X X Extracts X X X X X X X X Extracts X X X X ..... matter ex-parte, but what is seen is that the Adjudicating Authority even let this statutory time limit of one year pass without even adhering to the stipulation contained in the show cause notice that the matter would be decided ex-parte even if no cause is shown within thirty days. It appears that it is only on 07.09.2016 i.e. almost after a period of five months after the expiry of one year that the first hearing was fixed by the Adjudicating Authority on 07.09.2016 - There is absolutely no reason assigned in the written submissions or in the date and event chart as to why the cross-examination process continued for almost three years from 2018 upto 2021, when the adjudication itself was required to be completed within one year. Three dates for personal hearing were fixed in 2021 at an interval of almost one month and thereafter the show cause notice was adjudicated after nine months from the last date of personal hearing on 14.06.2022. A clear statutory time limit of one year is provided in sub-section (11) of section 11A for the Adjudicating Authority to adjudicate the show cause notice but no reason has been given in the impugned order as to why it was not feasible or practic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 55555/2023, 54690/2023, 54693/2023, 54872/2023, 55563/2023, 55682/2023, 55515/2023, 54783/2023, 55272/2023, 55163/2023, 55513/2023, 50265/2024, 50266/2024, 55557/2023, 55519/2023, 54870/2023, 55566/2023, 50594/2024, 55559/2023, 55677/2023, 55246/2023, 55270/2023, 55269/2023, 50184/2024, 50185/2024, 50183/2024, 50069/2024, 55443/2023, 50068/2024, 50066/2024, 50063/2024, 50065/2024, 55314/2023, 50171/2024, 55385/2023, 55386/2023, 50441/2024, 50187/2024, 50193/2024, 50078/2024, 55472/2023, 50005/2024, 50212/2024, 50174/2024, 55165/2023, 55166/2023, 55282/2023, 55286/2023, 55298/2023, 55283/2023, 55155/2023, 55213/2023, 55287/2023, 55297/2023, 55284/2023, 55277/2023, 55237/2023, 55252/2023, 55243/2023, 55279/2023, 55666/2023, 50278/2024, 50279/2024, 55278/2023, 55225/2023, 55421/2023, 55420/2023, 55238/2023, 55280/2023, 55244/2023, 55245/2023, 55236/2023, 55234/2023, 50135/2020, 50134/2020, 50614/2020, 50615/2020, 50136/2020, 52290/2022, 52289/2022, 50186/2024, 55681/2023, 50085/2024, 50277/2024, 50276/2024, 55543/2023, 50076/2024, 50077/2024, 55859/2023, 55858/2023, 55539/2023, 50222/2024, 50309/2024, 50226/2024, 50264/2024, 50272/2024, 50223/2024, 50225/2024, 50359/2024, 50294/2024, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pellants that the impugned orders deserve to be set aside for the sole reason that the Central Excise Officer did not determine the amount of duty of excise under sub-section (10) of section 11A within the period stipulated in sub-section (11) of section 11A shall be examined first, because in the event this issue is decided in favour of the appellants, it may not be necessary to examine the other two issues that have been raised by the learned counsel for the appellants. 5. To examine this issue, it would be appropriate to reproduce sub-sections (10) and (11) of section 11A. 6. Sub-section (10) of section 11A is as follows: 11A(10) The Central Excise Officer shall, after allowing the concerned person an opportunity of being heard, and after considering the representation, if any, made by such person, determine the amount of duty of excise due from such person not being in excess of the amount specified in the notice. 7. Sub-section (11) of section 11A, was thrice amended, and is reproduced, as it stood during the relevant period: From 28.04.15 to 13.05.2015 11A (11) The Central Excise Officer shall determine the amount of duty of excise under sub-section (10) (a) within six months ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the written submissions, provided a date and event chart regarding the proceedings undertaken by the Adjudicating Authority pursuant to the issuance of the show cause notice. It is reproduced below: Date Event 28.04.2015 Show cause notice issued requiring the noticee to show cause within 30 days, failing which the case would be decided ex-parte without any further communication. 07.09.2016 1st personal hearing fixed. Only M/s. Arihant Trading and Metals requested for supply of Relied Upon Documents 22.02.2018 Cross-examination allowed. However, none of the witness appeared 10.04.2018 Cross-examination allowed 11.04.2018 Cross-examination allowed 17.04.2018 Cross-examination allowed 20.09.2018 Cross-examination allowed 04.04.2019 Cross-examination allowed 17.06.2019 Cross-examination allowed 17.10.2019 Cross-examination allowed 20.10.2019 Cross-examination adjournment 12.01.2021 Cross-examination allowed 22.03.2021 Cross-examination allowed. Counsel was not available 26.07.2021 2nd Personal Hearing. Counsel requested for postponement 24.08.2021 3rd Personal Hearing. Counsel requested for adjournment 24.09.2021 4th Personal Hearing. KMPL and others filed written submission 14.06.202 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (11) of section 11A. In this connection, learned counsel placed reliance upon the judgment of the Delhi High Court in Swatch Group India Pvt. Ltd. vs. Union of India 2023 (386) E.L.T. 356 (Del.), wherein the provisions of section 28 (9) of the Customs Act, 1962 [the Customs Act] , which also require the proper officer to determine the amount of duty within a specified period, when it was possible to do so. Learned counsel placed reliance upon certain other decisions of High Courts, to which reference shall be made at the appropriate stage. 15. The said submissions advanced by the learned counsel for the appellant and the learned authorized representative appearing for the department have been considered. 16. The provisions of sub-section (11) of section 11A of the Central Excise Act have been reproduced above. Sub-section (9) of section 28 of the Customs Act which came up for consideration before the Delhi High Court in Swatch Group, therefore, requires to be reproduced. It was amended on 29.03.2018. The said sub-section, as it stood prior to amendment, is reproduced below: 28 (9) The proper officer shall determine the amount of duty or interest under sub-section (8), - (a) within ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ise Act, the Delhi High Court made the following observations: 31. Therefore, the question, which requires consideration now is whether in terms of erstwhile Section 28 (9) of the Customs Act, the impugned SCN dated 14-2-2018 has lapsed having not been adjudicated within the period of 12 months. In other words, whether in the facts and circumstances of the present case, it was not possible for the Revenue to adjudicate the impugned SCN within the period of 12 months from the date of issuance. 32. The unamended Section 28 (9) of the Customs Act, specifically provides that the proper officer shall determine the amount of duty within six months or within one year, as the case may be, from the date of notice. It only provides certain degree of inbuilt flexibility by incorporating the words where it is possible to do so . 33. The phrases as far as possible and as far as practicable appear in other statutes as well came up for consideration before the Apex Court in C.N. Paramasivam and Another v. Sunrise Plaza: (2013) 9 SCC 460/[2013] 30 taxmann.com 320 (SC). It is observed that the words possible and practicable are more or less interchangeable along with the other words such as feasibl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in abeyance thereafter pursuant to the circular dated 17-3-2021. 42. The respondent has merely produced various letters received from the petitioner, DRI, and others, and has contended that some adjournments were asked for by the petitioners. Admittedly, the matter was listed from time to time for a personal hearing. However, no justification has been provided as to why it was not possible for the Department to determine the amount of Customs duty within the prescribed period of time. 43. We have perused the documents and letters produced by the Department as referred above. It is seen that for a period of almost three years, various letters were exchanged. The matter was fixed for personal hearing on more than five occasions. No reason has been provided as to why the hearings were not concluded on the said dates and the duties payable, if any, were not determined. **** 46. In our view, there is no material to show that it was not possible for the proper officer to determine the amount of duty within the prescribed period. The mention of the words, where it is not possible to do so , in our opinion, does not enable the Department to defer the determination of the notices for an ind ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case (supra), Hon ble the Supreme Court upheld a Division Bench judgment of this Court where opinion expressed was that where no period of limitation is provided for exercise of any power, any notice issued more than five years thereafter was held to be unreasonable. 19. For the reasons mentioned above, we find that the notices in the present cases having been issued more than decade back and the proceedings having not been concluded within reasonable time, the same deserves to be quashed. 22. The Delhi High Court in Nanu Ram Goyal vs. Commissioner of CGST and Central Excise, Delhi 2023 (74) G.S.T.L. 17 (Del.) considered the provisions of section 73 of the Finance Act, 1994 [the Finance Act] . At the relevant time, this section did not provide for determination of the amount of service tax by the Central Excise Officer within a certain period, since sub-section (4B) of section 73 was introduced in the Finance Act w.e.f. 06.08.2014. Section 73 (4B) of the Finance Act provides that the Central Excise Officer shall determine the amount of service tax within six months from the date of notice where it is possible to do so, in respect of cases falling under sub-section (1) of section 7 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... every authority is to exercise the power within a reasonable period. What would be reasonable period, would depend upon the facts of each case. Whenever a question regarding the inordinate delay in issuance of notice of demand is raised, it would be open to the assessee to contend that it is bad on the ground of delay and it will be for the relevant officer to consider the question whether in the facts and circumstances of the case notice or demand for recovery was made within reasonable period. No hard and fast rules can be laid down in this regard as the determination of the question will depend upon the facts of each case. 20. In a later decision in State of Punjab Ors. v. Bhatinda District Cooperative Milk Producers Union Ltd. [(2007) 11 SCC 363 = 2007 (217) E.L.T. 325 (S.C.)], the Supreme Court had reiterated the aforesaid principle in the following words : 18. It is trite that if no period of limitation has been prescribed, statutory authority must exercise its jurisdiction within a reasonable period. What, however, shall be the reasonable period would depend upon the nature of the statute, rights and liabilities thereunder and other relevant factors. 21. As noted above, Sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... udication.***** ***** 17. In our opinion, even in absence of the provisions of sub-section (4)(B) of Section 73, respondent No. 2 could not have acted oblivious to the settled principle of law, that a show cause notice would be required to be adjudicated within a reasonable time depending the facts of each case. However, as observed by us in our decision in Coventry Estates Pvt. Ltd. v. Joint Commissioner, CGST and Central Excise Anr. (supra), reasonable time would not be an egregious, unjustified and unexplained inordinate delay. Having perused the reply affidavit, we find that no justification whatsoever is given by the Deputy Commissioner in Commissioner not adjudicating the show cause notice. We are thus of the opinion that the present case is clearly covered by our decision in Coventry Estates Pvt. Ltd. v. Joint Commissioner CGST and Central Excise Anr. (supra) in regard to the legal position we have set out. 18. In the light of the above discussion, we are certain that this petition is required to be allowed. It is accordingly allowed in terms of prayer clauses (a) and (b). (emphasis supplied) 24. It would also be useful to refer to the judgment of the Bombay High Court in Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in Parle International Ltd. vs. Union of India [2021 (375) E.L.T. 633 (Bom.)]. 9. Mr. Raichandani would submit that all these decisions would show a consistent view being taken by the Court that the show cause notice cannot be adjudicated after inordinate delay and the same would be required to be dropped, accepting the well-settled principles of law, that not only the proceedings are required to be initiated within a reasonable period but they are required to be adjudicated within a reasonable period. It is his submission that in the present case, there is nothing to indicate that the delay in any manner could be justified by the department. ***** 15. Considering the plain consequences, Section 73 (4B)(a) and (b) would bring about, it would be an obligation on the Central Excise Officer to determine the amount of service tax due under sub-section (2), within six months from the date of notice or within a period of one year from the date of notice, where it is possible to do so, in respect of cases falling under the proviso to sub-section (1) or the proviso to sub-section (4A). Thus, the statute itself prescribes for such period within which the service tax would be required to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hs against the legal rights and interest of the assessee, but also, in a given situation, it may adversely affect the interest of the revenue, if prompt adjudication of the show cause notice is not undertaken, the reason being a lapse of time and certainly a long lapse of time is likely to cause irreversible changes frustrating the whole adjudication. 20. We are also of the clear opinion that a substantial delay and inaction on the part of the department to adjudicate the show cause notice would seriously nullify the noticee s rights casuing irreparable harm and prejudice to the noticee. A protracted administrative delay would not only prejudicially affect but also defeat substantive rights of the noticee. In certain circumstances, even a short delay can be intolerable not only to the department but also to the noticee. In such cases, the measure and test of delay would be required to be considered in the facts of the case. This would however not mean that an egregions delay can at all be justified. This apart, delay would also have a cascading effect on the effectiveness and/or may cause an abridgement of a right of appeal, which the assessee may have. Thus, for all these reasons, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the matter would be adjudicated ex-parte without any further communication. It is seen that the period one year from 28.04.2015 expired on 27.04.2016. Even if cause was not shown by the noticees to the said notice, the Adjudicating Authority should have proceeded to decide the matter ex-parte, but what is seen is that the Adjudicating Authority even let this statutory time limit of one year pass without even adhering to the stipulation contained in the show cause notice that the matter would be decided ex-parte even if no cause is shown within thirty days. It appears that it is only on 07.09.2016 i.e. almost after a period of five months after the expiry of one year that the first hearing was fixed by the Adjudicating Authority on 07.09.2016. The chart submitted by the department further shows that after the first hearing was fixed on 07.09.2016, the matter was taken up on 22.02.2018 for cross-examination which period is itself after more than one year, and this cross-examination continued from 22.02.2018 to 22.03.2021 and though five dates for cross-examination were fixed in 2018, four dates were fixed in 2019 and thereafter two dates for cross-examination were fixed in 2021. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er a Statute to adjudicate the matter. The Adjudicating Authority cannot endlessly wait and has to utilize its discretion in a fair and reasonable manner so as to balance between the principles of natural justice and the time set out in the Statute for adjudication of the show cause notice. The show cause notice required the noticees to file a reply within thirty days, failing which it was mentioned that the matter would be adjudicated ex-parte. Assuming that no reply was filed by the noticees, still the Adjudicating Authority should have proceeded to adjudicate the show cause notice ex-parte as it was bound to adjudicate in show cause notice within one year, unless there were strong and compelling reasons for it not to adjudicate the show cause notice within the stipulated time. Learned authorized representative appearing for the department is, therefore, not justified in making this submission. Nothing has been shown which can even remotely demonstrate that there were circumstances, much less insurmountable exigencies, which prevented the Adjudicating Authority from completing the adjudication process within the stipulated term. 32. Learned authorized representative appearing for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8 in section 28 (9) of the Customs Act. It was contended that though the show cause notice was issued on 17.10.2017, but still section 28 (9) of the Customs Act, as amended on 29.03.2018, would be applicable. This is evident from paragraphs 9 and 10 of the decision of the Tribunal and the relevant portions are reproduced below: 9. The records indicate that in response to the show cause notice dated 17.10.2017, the appellant submitted an interim reply dated 07.04.2021 and contended that though section 28 (9) was amended on 29.03.2018, but it will also be applicable to show cause notices issued prior to this date and so in view of the amended provisions of section 28 (9) of the Customs Act, such proceedings shall be deemed to have been concluded as if no notice has been issued since the show cause notice was not adjudicated within the stipulated time. ***** 10. Thus, in effect, what was sought to be contended by the appellant in response to the show cause notice was that even though the show cause notice was issued on 17.10.2017, it would still be governed by the amended provisions of section 28 (9) of the Customs Act and, therefore, the proceeding should be concluded as the show cau ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ls that have been filed by the assessees for setting aside the impugned order. This would be apparent from the chart annexed as Annexure A to this order wherein details of the Excise Appeals, date of show cause notice, and the date of order has been provided. 45. It is evident that in all the 209 cases, the adjudication has taken place beyond the period stipulated in sub-section (11) of section 11A of the Central Excise Act and there is no plausible explanation as to why it was not possible for the Adjudicating Authority to complete the adjudication process within the stipulated time. 46. Thus, the impugned orders that have been assailed in all the 210 Excise Appeals would have to be set aside and are set aside. The appeals are, accordingly, allowed with consequential relief(s), if any to the appellant. (Order pronounced on 25.11.2024) Annexure A S.No. Excise Appeal No. Date of show cause notice Date of Order 1 E/50267/2024 19.05.2017 31.05.2022 2 E/50271/2024 30.03.2017 31.03.2022 3 E/50274/2024 05.04.2017 29.04.2022 4 E/50281/2024 05.04.2017 29.04.2024 5 E/50284/2024 30.03.2017 31.05.2022 6 E/50265/2024 31.03.2017 26.04.2022 7 E/55283/2023 30.03.2017 30.06.2022 8 E/55277/2023 30. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 31.03.2022 72 E/55568/2023 27.12.2016 30.06.2022 73 E/55522/2023 25.04.2017 28.04.2022 74 E/55226/2023 09.02.2016 30.06.2022 75 E/55523/2023 31.03.2017 29.04.2022 76 E/50067/2024 05.04.2017 29.04.2022 77 E/50458/2024 25.04.2017 29.04.2022 78 E/55521/2023 31.03.2017 31.03.2022 79 E/55517/2023 25.04.2017 30.06.2022 80 E/55665/2023 31.03.2016 28.06.2022 81 E/55518/2023 05.04.2017 29.04.2022 82 E/50570/2024 31.03.2016 11.05.2022 83 E/55188/2023 30.03.2017 31.05.2022 84 E/55410/2023 29.06.2016 30.05.2022 85 E/55412/2023 31.10.2016 31.03.2022 86 E/55411/2023 17.02.2017 31.05.2022 87 E/55555/2023 30.11.2016 27.06.2022 88 E/55563/2023 22.04.2017 28.02.2022 89 E/55515/2023 30.03.2017 31.05.2022 90 E/55513/2023 31.03.2017 26.04.2022 91 E/55519/2023 30.03.2017 07.07.2022 92 E/55559/2023 08.04.2016 20.04.2022 93 E/55246/2023 31.05.2017 30.03.2022 94 E/50183/2024 30.03.2017 18.07.2022 95 E/50066/2024 17.02.2017 31.08.2022 96 E/50065/2024 30.11.2016 30.06.2022 97 E/50171/2024 27.12.2016 30.06.2022 98 E/50078/2024 10.02.2016 30.06.2022 99 E/50174/2024 01.05.2017 31.05.2022 100 E/55298/2023 30.03.2017 30.06.2022 101 E/55213/2023 29.03.2017 28.02.2022 102 E/55297/2023 30.03.2017 28.06.2022 103 E/5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 30.06.2022 165 E/53972/2023 31.10.2016 31.03.2022 166 E/55067/2023 17.02.2017 31.05.2022 167 E/55069/2023 17.02.2017 31.05.2015 168 E/54690/2023 30.11.2016 24.06.2022 169 E/54693/2023 30.11.2016 24.06.2022 170 E/54872/2023 30.11.2016 24.06.2022 171 E/54783/2023 30.03.2017 31.05.2022 172 E/55272/2023 30.03.2017 31.05.2022 173 E/54870/2023 30.03.2017 07.07.2022 174 E/55270/2023 31.03.2017 30.03.2022 175 E/55269/2023 31.03.2017 30.03.2022 176 E/55385/2023 27.12.2016 30.06.2022 177 E/55386/2023 27.12.2016 30.06.2022 178 E/50441/2024 27.12.2016 30.06.2022 179 E/55472/2023 10.02.2016 30.06.2022 180 E/50005/2024 10.02.2016 30.06.2022 181 E/55165/2023 01.05.2017 31.03.2022 182 E/55166/2023 01.05.2017 31.03.2022 183 E/55155/2023 30.03.2017 07.07.2022 184 E/55252/2023 30.11.2016 30.06.2022 185 E/55243/2023 30.11.2016 30.06.2022 186 E/55421/2023 27.12.2016 29.06.2022 187 E/55420/2023 27.12.2016 29.06.2022 188 E/55244/2023 29.03.2017 31.07.2022 189 E/55245/2023 30.03.2017 21.07.2022 190 E/52290/2022 09.01.2020 23.03.2022 191 E/52289/2022 09.01.2020 24.03.2022 192 E/55859/2023 27.12.2016 30.06.2022 193 E/55858/2023 27.12.2016 30.06.2022 194 E/55539/2023 27.12.2016 30.06.2022 195 E/55543/2023 30 ..... 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