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TMI Blog2025 (3) TMI 1131X X X X Extracts X X X X X X X X Extracts X X X X ..... levant portion of Section 11A of the Act is pari materia to the corresponding provisions of the Customs Act, the Finance Act and the CGST Act, and thus, the mandate of the said judgement is applicable to the present cases. The Respondents in the impugned OsIO have not given any explanation as to why the SCN could not be decided finally for over 11 years. However, in the counter affidavits, the Respondents have endeavored to give a feeble justification for the delayed adjudication premised on (a) the advent of the CGST Act in 2017 & its shortfall in the administrative functioning subsequently, (b) COVID-19 and (c) the delay caused by the Petitioners by not filing reply on time or filing belated reply to the SCN and by avoiding joining the physical hearings. In Vos Technologies India, this Court categorically held that, matters having financial liabilities or penal consequences cannot be kept unresolved for years; and the phrase "where it is possible to do so" cannot be a license to keep matters pending for years. The flexibility provided by the legislation is not meant to be overused or construed as sanctioning indolence. The statutory leverage cannot be brought into play routinel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Raw Materials 54,750 3. The Petitioner firms were engaged in the manufacturing and clearance of footwear and soles falling under Chapter headings 6402 and 6406 of the Central Excise Tariff Act, 1985. 4. Further to this search, a common Show Cause Notice [SCN] dated 25.10.2011 came to be issued and on the passage of the Central Goods and Services Tax Act [CGST Act], 2017, the jurisdiction of the Respondent authorities altered and two (2) impugned OsIO came to be issued. 5. Two SCNs dated 25.10.2011 and 30.12.2014 came to be issued to the Petitioners. One in respect of the seized goods and the other for the offended goods (past clearances). 6. A common SCN dated 25.10.2011 was issued by Deputy Commissioner (AE), Central Excise, Delhi-1, to the Petitioners to show cause, as to: - (a). Why the seized goods should not be confiscated under Rule 25 of the Rules [w.r.t. all Petitioner firms], (b). Why the amount of Rs. 15,00,000/- voluntarily deposited should not be appropriated towards duty liability [w.r.t. M/s Paras Products, the Petitioner in W.P.(C) 6235/2023 only]; and (c). Why penalty should not be imposed under Rule 25 for contravention of the provisions of the Rules [ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ster this argument, the Respondent would place reliance on the decision of the Hon'ble Supreme Court in Commissioner, GST and Central Excise Commissionerate & Ors. vs. M/s Swati Menthol and Allied Chemicals Ltd & Anr. SLP (C) No. 20072/2021 dated 10 July 2023 wherein the Department was allowed to conclude the adjudication in a time-bound manner even after the SCN was adjudicated after over a decade. ANALYSIS: 13. The date of issuance of the SCN and the impugned OsIO are not disputed. The SCN was issued on 25.10.2011 and finally adjudicated on 30.12.2022 and 02.03.2023 i.e after 11 years. The following table summarizes the time consumed in adjudicating the SCN dated 25.10.2011 and also the reasons for the delay in adjudication as per the Respondents: Petitioner Search conducted on Show Cause Notice Reply OIO passed on Primary reasons for delay as per the Respondents (as given in the counter affidavits) M/s Paras Products [W.P.(C) 6235/2023] 29.04.2011 25.10.2011 14.12.2021 30.12.2022 Delay caused by the petitioner himself by delaying the submission of reply Introduction of GST regime. M/s Sai Enterprises [W.P.(C) 6376/2023] 29.04.2011 No Response filed despite lette ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ied in the notice. (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. (11) The Central Excise Officer shall determine the amount of duty of excise under sub-section (10)- (a) within six months from the date of notice where it is possible to do so, in respect of cases falling under sub-section (1); (b) within two years from the date of notice, where it is possible to do so, in respect of cases falling under sub-section (4)." 15. This court, in Vos Technologies India, had the opportunity to consider the effect of inordinate delay and failure on the part of the tax authorities to conclude the adjudication proceedings within a reasonable period of time (arising out of the Customs Act [Custom Act], 1962, the Finance Act, 1994 [Finance Act] and the CGST Act) and held that such delay/ failure to act within a reasonable period of time, constituted sufficient ground to quash such proceedings. This Court also held that the authorities are bou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eferable to Section 73 must be issued at least three months prior to the time limit as specified in sub-section (10) coming to an end. It is relevant to observe that Section 73 (10) of the CGST Act uses the words "shall issue" and does not adopt the "where it is possible to do so" phraseology as employed by the Customs Act and 1994 Act. Similar is the position that obtains in cases where fraud, wilful misstatement or suppression of facts may be alleged, and in which eventuality it is the provisions of Section 74 of the CGST Act which would govern. ***** 74. The meaning to be ascribed to the phrase "where it is possible to do so" was lucidly explained in Swatch Group. As the Court observed on that occasion, while the aforesaid expression did allow a degree of flexibility, it would have to be understood as being concerned with situations where the proper officer may have found it impracticable or impossible to conclude proceedings. Swatch Group had explained that expression to be applicable only where the proper officer were faced with "insurmountable exigencies" and further recourse being rendered "impracticable or not possible". It thus held that the leeway provided by the stat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed unnecessarily with no plausible explanation. The inaction and the state of inertia which prevailed thus leads us to the inevitable conclusion that the respondents clearly failed to discharge their obligation within a reasonable time. The issuance of innumerable notices would also not absolve the respondents of their statutory obligation to proceed with promptitude bearing in mind the overarching obligation of ensuring that disputes are resolved in a timely manner and not permitted to fester. Insofar as the assertion of the assessees' seeking repeated adjournments or failing to cooperate in the proceedings, it may only be noted that nothing prevented the respondents from proceeding ex parte or refusing to reject such requests if considered lacking in bona fides. 87. We are further constrained to observe that the respondents also failed to act in accord with the legislative interventions which were intended to empower them to pursue further proceedings and take the adjudicatory process to its logical conclusion. We have in the preceding paragraphs of this decision taken note of the various statutory amendments which were introduced in Section 28 and were clearly intended to rati ..... X X X X Extracts X X X X X X X X Extracts X X X X
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