TMI Blog2020 (11) TMI 842X X X X Extracts X X X X X X X X Extracts X X X X ..... f. Taking cognizance of such an aspect would amount to giving credence to extraneous matters. In any case such a procedure internally adopted by the respondents is not binding on the Court. In the present case, it is evident that the delay in adjudication of the show-cause notices could not be attributed to the petitioner. The delay occurred at the hands of the respondents. For the reasons mentioned, respondents have kept the show-cause notices in the call book but without informing the petitioner. Upon thorough consideration of the matter, we are of the view that such delayed adjudication after more than a decade, defeats the very purpose of issuing show-cause notice. When a show-cause notice is issued to a party, it is expected that the same would be taken to its logical consequence within a reasonable period so that a finality is reached. A period of 13 years as in the present case certainly cannot be construed to be a reasonable period. Petitioner cannot be faulted for taking the view that respondents had decided not to proceed with the show-cause notices. An assessee or a dealer or a taxable person must know where it stands after issuance of show-cause notice and submiss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... excisable goods falling under Chapter No.39 of the Central Excise Tariff Act, 1985. Petitioner was registered under the central excise department and used to file returns in accordance with the Central Excise Act, 1944 and the rules made thereunder. It is also stated that petitioner was availing CENVAT credit on inputs and capital goods under CENVAT credit rules of different years. 4. A show-cause notice dated 01.06.2006 under Rule 25 of the Central Excise Rules, 2002 was issued by the Joint Commissioner of Central Excise and Customs, Vapi alleging amongst others that petitioner had availed excess CENVAT credit amounting to ₹ 11,52,281.00. This was followed by another show-cause notice dated 28.11.2006 issued to the petitioner by the Deputy Commissioner of Central Excise and Customs, Vapi alleging amongst others that petitioner had wrongly availed excess CENVAT credit of ₹ 98,324.00. 5. Petitioner responded to the above show-cause notices by submitting detailed replies on 04.09.2006 and 25.01.2007 respectively denying the allegations made against it. 6. Thereafter nothing was heard by the petitioner and there was no communication to the petitioner either from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... record the order-in-original dated 11.11.2019 and the challenge thereto. 10. Be it stated that by the order dated 11.11.2019, respondent No.3 confirmed the demand of central excise duty of ₹ 11,52,281.00 as per show-cause notice dated 01.06.2006 besides ordering payment of interest and imposition of penalty. However, the proceeding initiated vide show- cause notice dated 28.11.2006 was dropped. In the said order, it was mentioned that the two show-cause notices were transferred and kept in call book in view of pendency of department's appeal on similar issue before the Gujarat High Court in the case of the petitioner itself i.e., Tax Appeal No.359 of 2011. The appeal was subsequently disposed of on 17.06.2015 whereafter as per direction of higher authority both the show-cause notices kept in the call book were retrieved for commencement of adjudication proceedings. 11. Respondents have filed affidavit in reply. Stand taken in the affidavit is that respondents had kept the adjudication pursuant to the show-cause notices in abeyance in view of circular dated 26.05.2003 of the then Central Board of Excise and Customs. Accordingly, the two showcause notices dated 01.06 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the show-cause notices when the matter had become stale. Respondents cannot be permitted to indulge in this kind of activities as this will lead to unsettling settled position. Not content with belated initiation of adjudication proceedings, respondents have tried to circumvent the proceedings before this Court by passing the order-in-original dated 11.11.2019. He has placed reliance on a number of decisions to contend that such action on the part of the respondents is impermissible in law. 14. On the other hand learned counsel for the respondents submits that delay in adjudication was not intentional. The show-cause notices were kept in call book because of pendency of appeal in respect of the petitioner itself before the High Court. After disposal of the High Court appeal, the two show-cause notices were retrieved from the call book whereafter on permission being granted by the higher authority, adjudication proceedings were commenced. When opportunity of personal hearing was granted to the petitioner, it did not avail the same whereafter the order-in-original was passed on 11.11.2019. Therefore, petitioner cannot argue that the order-in-original was passed by the adjudicati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er in the facts and circumstances of the case, such delayed adjudication of the show-cause notices would be just, proper and legal? Ancillary to the above question would be the question as to whether the order-in-original passed pursuant to such adjudication would be legally tenable? Further question which would arise for consideration is whether such an order passed after filing of the writ petition before the High Court questioning the inordinate delay in adjudication would stand the test of reasonableness and legality? 19. Way back in 1983, this Court in Bhagwan S. Tolani Vs. B. C. Agrawal, 1983 (12) ELT 44 examined an adjudication proceeding which was started after 11 years of issue of show-cause notice. It was held that a stale matter could not be allowed to be reopened, since to allow it to be reopened would cause serious detriment and prejudice to the petitioner. When the department had contended that there was no limitation in commencing adjudication proceedings, this Court held that if such contentions as to limitation were to be accepted, it would mean that the department can commence adjudication proceedings 10 years, 15 years or 20 years after the original show-c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... each case. There is no rigidity or inflexibility, in the sense, a time is prescribed in the judgments of this Court and that is termed as reasonable. Thus, what would be a reasonable time depends upon the facts and circumstances of each case. Surely, a period of 13 years as was found in the case of Shirish Harshavadan Shah (supra) and equally long period in the case of Cambata Indus. Pvt. Ltd. (supra) was not termed as reasonable. This Court, relying upon the judgment of the Hon'ble Supreme Court in the case of Government of India vs Citedal Fine Pharmaceuticals Madras Ors., reported in AIR 1989 SC 1771, held that in absence of any period of limitation, it is settled law that every authority should exercise the power within a reasonable period. What would be the reasonable period would depend upon the facts of each case and no hard and fast rule can be laid down in this behalf. 16. In the case of Lanvin Synthetics Private Ltd. as well, the period of 17 long years was found to be entirely unreasonable. Concededly in the present case, the show-cause notice was issued on 28th March 2002. The petitioners forwarded their reply to the show-cause notice after receipt thereof on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly and within a reasonable time. We do not therefore find the explanation from paragraphs 14 to 18 of this affidavit to be enough for granting the Revenue an opportunity to now adjudicate the subject show-cause notice. We have not found from any of these averments and statements in the affidavit that there was a bar or embargo, much less in law for adjudicating the show-cause notice. This Court indulged the Revenue enough and by giving them an opportunity to file an additional affidavit. The additional affidavit as well, does not indicate as to why the Revenue took all these years, and after conclusion of the personal hearing in the year 2004, to pass the final order. Now allowing the Revenue to pass orders on the subject show-cause notice would mean we ignore the principle of law referred above. Secondly, we also omit totally from our consideration the complaint of the petitioner that in a matter as old as of 1999, if now the adjudication has to be held, it will be impossible for them to trace out all the records and equally, contact those officials who may not be in their service any longer. Thus, they would have no opportunity, much less reasonable and fair, to defend the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... same. In the absence of any period of limitation it is incumbent upon every authority to exercise the power of adjudication post issuance of show-cause notice within a reasonable period. This Court referred to the earlier decision in Sanghavi Reconditioners Private Limited (supra) and held that when the revenue keeps the show-cause notice in call book then it should inform the parties about the same. It serves two purposes - (1) it puts the party to notice that the show-cause notice is still alive and is only kept in abeyance. This would enable the party concerned to safeguard the evidence till the show-cause notice is taken up for adjudication; and (2) if the notices are kept in call book, the parties gets an opportunity to point out to the revenue that the reasons for keeping it in call book are not correct and that the notices should be adjudicated promptly. Thus, informing the parties about keeping the show-cause notice in call book would advance the cause of transparency in revenue administration. It was held as under:- 9. In the present facts, it is the case of the petitioner that because of long delay, papers and proceedings relevant to meet the show-cause notice are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ter the show-cause notices are retrieved from the call book on the dispute which led to keeping it in the call book being resolved. This, admittedly has not been done by the Revenue in this case. 23. In the present case, it is evident that the delay in adjudication of the show-cause notices could not be attributed to the petitioner. The delay occurred at the hands of the respondents. For the reasons mentioned, respondents have kept the show-cause notices in the call book but without informing the petitioner. Upon thorough consideration of the matter, we are of the view that such delayed adjudication after more than a decade, defeats the very purpose of issuing show-cause notice. When a show-cause notice is issued to a party, it is expected that the same would be taken to its logical consequence within a reasonable period so that a finality is reached. A period of 13 years as in the present case certainly cannot be construed to be a reasonable period. Petitioner cannot be faulted for taking the view that respondents had decided not to proceed with the show-cause notices. An assessee or a dealer or a taxable person must know where it stands after issuance of show-cause notice an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h Court, is in seisin of a matter, an administrative or executive authority cannot start a parallel proceeding on the very same subject matter at its own ipse dixit and record a finding. It would amount to interfering with the dispensation of justice by the courts. In the instant case, when the Court was set to examine the grievance of the petitioner regarding non-release of the goods despite the order-in-original, what was sought to be done was to present the Court with an order passed in the midst of such examination keeping the Court totally in the dark saying that the order-in-original suffers from illegality or impropriety directing the subordinate authority to apply to the Commissioner (Appeals) to set aside the order-in-original and then contending that the writ petition should be dismissed because of the subsequent development or that the petitioner should be relegated to the appellate forum to contest the subsequent order. As pointed out above, this amounts to interfering with the administration of justice and is thus not at all acceptable. A view may be taken that such an order should be ignored as it is contumacious. 26. The above aspect also requires a serious cons ..... X X X X Extracts X X X X X X X X Extracts X X X X
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