TMI Blog2021 (2) TMI 910X X X X Extracts X X X X X X X X Extracts X X X X ..... at the show cause notice remained undecided as it had been consigned to call book in view of CBEC Circular 162/73/95-CX dated 14.12.1995 to await outcome of a similar case. The Court held that consistent approach adopted by different High Courts is that the revival of the proceedings after long time gap without any proper explanation is unlawful and arbitrary. The Court also held that the said circular cannot be said to have issued in exercise of powers under section 37B of the Central Excise Act as concept of call book did not relate to uniformity in classification of excisable goods, or to levy of excise duties on such goods. Instructions to consign a case to call book relatable to adjudicatory process, and do not provide for any incidental or supplemental matters, consistent with the Act or Rules thereunder. The Court held that the CBEC is not empowered to issue instructions to any adjudicatory authority in relation to matters pending for adjudication before it. Consignment of matter to call book were on grounds extraneous to proceedings and not due to impossibility of authority to decide the case and hence the Court held that transferring the matter to call book is contrary to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 005 and the challenge to the same was made by the petitioner by two separate appeals before the CESTAT. The same resulted in favour of the petitioner on 02.12.2005, whereby the Tribunal waived the pre-deposit of the amount demanded and set aside the impugned order and remanded the matter to the Commissioner for once again deciding by clearly holding that it was in breach of the principles of natural justice - The transfer to the call book was on the ground that there was yet another matter on the very legal issue, which was pending before this Court, being Special Civil Application No. 537 of 2007, which came to be decided by this Court in the year 2017. However, from 26.06.2006 till the issuance of notice in the month of November, 2020, at no stage, there had been any intimation given to the petitioner on the part of the respondent. Least that could be expected from the authorities, more particularly, in wake of the circular of CBEC Circular No.1053/2/2017-CX dated 10.03.2017 as provided in paragraphs 9.4 of the said circular is to formally communicate to the party about transferring the matter to the call book. The Court also notices that not only the factory of the petitioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ursuance of and/or in implementation and/or in furtherance of the impugned show cause notice F.No.V/Ch.54)03=-10/Dem/2004 dated 16.04.2004, the then Commissioner of Central Excise and Customs, Surat-II. (d) An ex-parte ad-interim relief in terms of prayer (d) above may kindly be granted; (e) Such other and further order or orders as may be deemed just and proper in the facts and circumstance of the present case may kindly be granted. 2. The facts, in a capsulized form, are as follows: 2.1 The petitioner is a company incorporated under the Companies Act, 1956, which manufactures Polyester Texturized Yarn (PTY) of Chapter 54 of the First Schedule to the Central Excise Tariff Act, 1985. During the period of dispute, it was 100% Export Oriented Unit (EOU). 2.2 Petitioner No.2 was a Director of petitioner No.1 company. The petitioner company was granted licence under section 58 of the Customs Act to operate as a private bonded warehouse for the storage of imported/indigenous machinery and equipment, raw materials, consumables, components, spares, packing materials and finished goods and machinery and equipment. 2.3 The petitioner removed, from time to time, the excisa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Commissioner was again not available in the office. This is clear from the letter dt.16.2.2005 written by the appellant to the Commissioner. As per the appellants notices for the next date of hearing were not received by them and as such appearance could not be caused. 3. It is also seen that though the appellant had field reply to the show cause notice vide their letter dt.21.8.04, the Commissioner observed in the impugned order that no reply has been filed by the appellant. As such, he has passed the order without considering the submissions made by the appellant vide their reply dt.21.8.2004. 4. for all the above reasons, we set aside the impugned order and remand the matter to Commissioner in re-decision after observing the principles of natural justice. 6. The petitioners, thereafter, closed the factory and after surrendering the registration, sold the factory in the year 2012. 7. The grievance on the part of the petitioner is that almost after 15 years of the remand by the Appellate Tribunal, respondent No.2 scheduled personal hearing of the show cause notice on 08.12.2020 by sending intimation to the petitioner by email on 20.11.2020. The petitioner, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Apex Court where the quashment of the show cause notice has not been questioned by the Court. However, it has admitted the matter for the limited purpose of examining the circular of transferring the matter to the call book. 11.2 Learned Senior Counsel further relied on the decisions of M/s. Parimal Textiles vs. Union of India, 2018(8) G.S.T.L.361(Guj.), Alidhara Textile Engineers Ltd. Ors. vs. Union of India, 2017 (3) GLH 306, Shivkurpa Processors Pvt. Ltd. vs. union of India, 2018 (362) E.L.T. 773 (Guj), Meghmani Organics Ltd. vs. Union of India 2019 (368) E.L.T. 433 (Guj.), and Yangir Properties and Trading Ltd. vs. Union of India decided by this Court in Special Civil Application No. 8933 of 2018 on 06.02.2019, where on the sole ground of inordinate delay in adjudication, the show cause notices have been quashed. 11.3 He further relied on the decision of Bhagwandas S. Tolani vs. B.C. Agarwal and others, 1983 (12) ELT 44 (Bom.), wherein, the adjudication proceedings restarted after 11 years, were struck down by the Bombay High Court, where the hearing had taken place long ago, but the formal order was not received and there was no explanation from the departmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a case of M/s. Parimal Textiles (supra), the very arguments had been advanced by the union and the Court had yet dealt with the matter and quashed and set aside the show cause notice on the ground that the admission in the case of Siddhi Vinayak Syntex Pvt. Ltd.(supra) was on a limited ground of challenging the circular. 13. Having thus heard both the sides extensively the short issue that deserves consideration of this Court is as to whether after the remand made by the Appellate Tribunal in the year 2005, whether initiation of proceedings in the year 2020 without putting the petitioners to notice of transfer of call book at any juncture in the interregnum is permissible under the law. More particularly, when the petitioner has already sold of its factory and also surrendered his registration before the authority. 14. Before adverting to the factual matrix further, the law on the subject deserves consideration. 14.1 In the case of Siddhi Vinayak Syntex Pvt. Ltd. (supra), this Court extensively examined the maintainability of writ petition in wake of the existence of alternative remedy, where there was a delay of adjudication of show cause notice after 17 years. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Directorate, Mumbai (supra), was relied upon wherein in the facts of the said case for a period of almost twelve years, no steps had been taken by the respondents therein to proceed with the adjudication proceedings. The court held that no fault could be attributed to the petitioners for this delay and inaction on the part of the respondents; the respondents had not alleged any malice on the part of the petitioners nor was it the case of the respondents that the petitioners therein were responsible for the delay in the proceedings. The court found no justification in the explanation tendered for causing delay in the adjudication proceedings and held that the department was not entitled to re-open old matters in this manner and if the department s contention as to limitation were to be accepted, it would mean that the department can commence adjudication proceedings twenty years, twenty-five years or thirty years after the original show cause notice, which cannot be permitted. 17. In Hindustan Lever Limited v. Union of India (supra), the Bombay High Court held that the extent of delay which had occurred in adjudication upon the issues was also relevant. The court observed th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ect to levy of duties of excise on such goods or for the implementation of any other provision of this Act, issue such orders, instructions and directions to the Central Excise Officers as it may deem fit, and such officers and all other persons employed in the execution of this Act shall observe and follow such orders, instructions and directions of the said Board: Provided that no such orders, instructions or directions shall be issued- (a) so as to require any Central Excise Officer to make a particular assessment or to dispose of a particular case in a particular manner: or (b) so as to interfere with the discretion of the Commissioner of Central Excise (Appeals) in the exercise of his appellate functions. 21. Thus, under section 37B of the Act, the Central Board of Excise and Customs is empowered to issue instructions to Central Excise Officers if it considers it necessary or expedient to do so firstly, for the purpose of uniformity in the classification of excisable goods; secondly with respect to levy of duties of excise on such goods; and thirdly, for the implementation of any other provision of the Act. Insofar as the concept of call book is concerned, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection (11) which provides that the Central Excise Officer shall determine the amount of duty of excise under subsection (10) (a) within six months from the date of notice where it is possible to do so, in respect of cases falling under subsection (1); (b) within one year from the date of notice, where it is possible to do so, in respect of cases falling under subsection (4) or sub-section (5). 24. Thus, with effect from the year 2011 a time limit has been prescribed for determining the amount of duty of excise where it is possible. It cannot be gainsaid that when the legislature prescribes a time limit, it is incumbent upon the authority to abide by the same. While it is true that the legislature has provided for such abiding by the time limit where it is possible to do so, sub-section (11) of section 11A of the Act gives an indication as to the legislative intent, namely that as far as may be possible the amount of duty should be determined within the above time frame, viz. Six months from the date of the notice in respect of cases falling under sub-section (1) and one year from the date of the notice in respect of cases falling under sub-section (4) or sub- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tice within a reasonable time. In view of the settled legal position, as propounded by various High Courts, with which this court is in full agreement, the revival of proceedings after a long gap of ten to fifteen years without disclosing any reason for the delay, would be unlawful and arbitrary and would vitiate the entire proceedings. 25. Examining the matter from another angle, it is the stand of the respondents that the matter was kept in the call book for all these years to await the outcome of a similar case in the case of M/s. Siddharth Petro Products Limited and others, which was pending before the Appellate Tribunal. In such a situation, the decision in the case of the petitioner should be governed by the decision of the Appellate Tribunal. However, the respondents after keeping the matter in the call book for fifteen years, have thereafter chosen not to follow the outcome of the other matter wherein the show cause notice had been dropped by the adjudicating authority, and the Appellate Tribunal had dismissed the appeal, albeit on grounds other than on merits. 26. Moreover, as is evident from the facts noted hereinabove, the respondents while consigning the matte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d thus: 6. Under similar circumstances, one of the entities Siddhi Vinayak Syntex Pvt Ltd. had approached this Court and asked for similar relief. Division Bench of this Court by a judgement dated 7.3.2017 in Special Civil Application No.19437/2016 allowed the petition making the following observations : 23. Insofar as the show cause notice in the instant case is concerned, the same has been issued under section 11A of the Act. Proceedings under section 11A of the Act are adjudicatory proceedings and the authority which decides the same is a quasi judicial authority. Such proceedings are strictly governed by the statutory provisions. Section 11A of the Act as it stood at the relevant time when the show cause notice came to be issued, provided for issuance of notice within six months from the relevant date in ordinary cases and within five years in case where the extended period of limitation is invoked. Section 11A thereafter has been amended from time to time and in the year 2011, various amendments came to be made in the section including insertion of sub-section (11) which provides that the Central Excise Officer shall determine the amount of duty of excise under su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of a higher forum. This court is of the view that the concept of call book created by the CBEC, which provides for transferring pending cases to the call book, is contrary to the statutory mandate, namely, that the adjudicating authority is required to determine the duty within the time frame specified by the legislature as far as possible. Moreover, as discussed hereinabove, there is no power vested in the CBEC to issue such instructions under any statutory provision, inasmuch as, neither section 37B of the Central Excise Act nor rule 31 of the rules, envisage issuance of such directions. The concept of call book is, therefore, contrary to the provisions of the Central Excise Act and such instructions are beyond the scope of the authority of the CBEC. Transferring matters to the call book being contrary to the provisions of law, the explanation put forth by the respondents for the delay in concluding the proceedings pursuant to the show cause notice 3.8.1998 cannot be said to be a plausible explanation for not adjudicating upon the show cause notice within a reasonable time. In view of the settled legal position, as propounded by various High Courts, with which this court is in f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d Order in original No.AHMEXCUS0030401516 dated 11.3.2016 as well as the Show Cause Notice F.No.V.54/1529/ OA/98 dated 3.8.1998 are hereby quashed and set aside. Rule is made absolute with no order as to costs. 7. We are informed that the department carried the issues before the Supreme Court. The Supreme Court has however entertained the department s appeal to the limited extent of deciding whether circular issued by CBEC providing that the proceedings be kept in call book is in conformity with the provisions of section 37B of the Central Excise Act. It can thus be seen that the judgement of the High Court rendered in identical facts is not disturbed by the Supreme Court insofar as its main impact on quashing the show cause notice and the orderinoriginal is concerned. Even without going into the question whether the circular of CBEC was valid or not, the judgement of the Division Bench in case of Siddhi Vinayak would apply in the present cases. In all cases, the department had issued show cause notices sometime in the year 2000. These proceedings were kept in call book without intimating the noticees. Without service of any further notices on the petitioners, the order in or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proceedings were not held for 11 years since that is the department's case. 6. It is true that no period of limitation has been prescribed for such adjudication. It follows also that the adjudication proceedings cannot be held twice over. The petitioner has averred that the adjudication proceedings took place at New Delhi and that is the position, which it would be reasonable to accept because of long lapse of time. The petitioner has also pointed out that certain directions were given to the Reserve Bank of India for lifting the earlier ban. It was open to the department to enquire from the Reserve Bank of India which also is a government concern as to what were the directions given to it earlier and subsequently for lifting the ban. 7. There is also one more aspect of the matter. In the reply, the firm has pointed out that almost all the relevant records have been destroyed and the persons who was in charge is no longer in their employment. In my view, even without considering the case that adjudication proceedings had in fact been held, I am of the opinion that this is otherwise also a stale matter which cannot be allowed to be reopened, since to allow it to be re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce. Therefore, the party can then safeguard its evidence, till the show cause notice is taken up for adjudication. Secondly, if the notices are being kept in the call book for some reason, the party gets an opportunity to point out to the Revenue that the reasons for keeping it in call book are not correct and the notices could be adjudicated upon immediately. This is the transparent manner in which the State administration must function. 10. In fact, we note that the above manner of functioning is the objective of the State administration, as our attention has been drawn to the C.B.E C Circular No.1053/2017-CX dated 10.03.2017. In paragraph 9.4 of the circular of C.B.E C. has directed the officers of the department to formally communicate to the party that the notices which have been issued to them, are being transferred to the call book. This would be expected of the State even in the absence of the above circular; the circular only states the obvious. In this case, the show cause notices were kept in the call book not at the instance of petitioner, but by the Revenue of its own accord. After having kept in in the call book, no intimation/communication was sent by the Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7, which came to be decided by this Court in the year 2017. However, from 26.06.2006 till the issuance of notice in the month of November, 2020, at no stage, there had been any intimation given to the petitioner on the part of the respondent. Least that could be expected from the authorities, more particularly, in wake of the circular of CBEC Circular No.1053/2/2017-CX dated 10.03.2017 as provided in paragraphs 9.4 of the said circular is to formally communicate to the party about transferring the matter to the call book, as held by the Apex Court. Even without such circular also, it is expected of the authorities that it cannot, on its own, place the matter in a call book without the assessee knowing as to what was happening at the end of the authorities. Transparency is the hallmark of every system and, more particularly, the authorities is obligated to adopt transparency, while dealing with citizens and with the technological advancement, it is much easier to communicate. Assuming that in the year 2006 and 2007, the information technology was at its nascent stage, that would not, in any manner, take away the responsibility of the authorities to intimate the assessee, who would b ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
