TMI Blog2023 (12) TMI 846X X X X Extracts X X X X X X X X Extracts X X X X ..... 9;s D.O.F.No.223/8/85-CX.6, dated 21-3-1985 had already stipulated a maximum period of 6 months from the date of issue of show cause notice within which the case is to be decided and as far as possible, this limit is to be adhered to. The said circular is in force as on today. In the present case, admittedly no intimation was provided to the petitioner with regard to keeping the call book and even in that case also, the Act provides time limit of six months to pass orders. However, in the present case, citing the internal circular issued by the respondents to keep the matters in the call book, the respondents have failed to adhere to the time limit provided in the statute. The circular is beyond the scope of the provisions of the Act and notifications provided therein. Therefore, keeping the call book without intimation to the petitioner and beyond the scope of the Act is unacceptable - the respondent department cannot keep the matter pending for a period of 12 years and thus, the present proceedings is clearly barred by limitation. This Court is of the considered view that present proceedings could not be allowed to continue after a period of 12 years, particularly, when the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ondent. The petitioner received the audit objections from the third respondent, wherein it is stated that duty had not been paid on the branded goods by the job-worker and no evidence had been provided for payment of duty on the milk cans manufactured by Oscar Indus. The audit objections also requested the petitioner to direct Oscar Indus to pay the duty and to submit proof. The petitioner responded to the audit objections stating that the milk cans are kitchen utensils subject to Nil rate of duty vide Notification No.10/2003 - CE 01.03.2003 and thus, there can be no excise duty levied on the manufacture of milk cans. 2.3. Thereafter, the impugned show cause notice was issued by the first respondent proposing to demand excise duty of Rs. 11,29,864/- on the milk cans cleared from 2005-06 to May 2008 along with interest u/s.11-AB of the Central Excise Act, 1944 [for brevity 'the Act'] and penalty under Section 11-AC of the Act. The show cause notice also proposed to invoke extended period of limitation under Section 11-A of the Act alleging that the petitioner had suppressed the facts regarding the manufacture and clearance of milk cans to the knowledge of the first resp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alone. Learned counsel further submitted that Section 11A(2A)(a) of the Act as it existed during the impugned period, contemplated a time limit of one year for the Central Excise Officer to determine the amount of duty where it was not paid or short-levied by reason of fraud, collusion or any other willful mis-statement or suppression of facts. Admittedly, Section 11A(2A) of the Act prescribed the above time lines to be followed where it is possible to do so . Even assuming, there was some impossibility in adjudicating the show cause notice, a delay of 12 years is unreasonable and completely unfair. Learned counsel further submitted that Section 11- A of the Act was substituted vide Finance Act, 2011, w.e.f. 08.04.2011 and Section 11-A(11) of the Act prescribed clear time lines for determination of excise duty after issuance of notice. As last amended w.e.f. 14.05.2016, Section 11A(11)(b) of the Act prescribed that a Central Excise Officer shall determine the amount of duty due within two years where the duty was not paid or short-levied by reason of fraud, collusion or any other willful misstatement or suppression of facts. Further, prior to stipulation of such time lines in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of duty under sub-section 10, within one year from the date of notice where it is possible to do so. Therefore, the time limit is not applicable to all the cases and it is applicable only to the show cause notices where the adjudicating authority was able to decide the cases. In the instant case, the Central Excise Officer was not in a position to adjudicate the cases as the department contested the issue with the Audit as there were audit objections. Therefore, the cases were transferred to call book as per the instructions issued therein. Hence, it is not mandatory for the respondents herein to decide all the cases within one year from the issue of notice. In other words, the time limit is dependent on the circumstances of the case. In view of the same, the adjudicating authority has not deliberately delayed the adjudication proceedings. Hence, the time limit prescribed u/s.11A(11)(b) of the Act, is not applicable to the show cause notice in question. 8. Learned counsel further submitted that all audit objections relating to Central Excise and Service Tax issued prior to 01.03.2014 shall be compared with the pending Action Taken Notes (ATNs), received from the office of CAG, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The Government of India issued a circular dated 21.12.1992, which reads as follows: Circular : 20/92-CX.6 dated 21-Dec-1992 Adjudication - Time limit for finalisation of Circular No.20/92-CX.6, dated 21-12-1992 [From F.No.213/28/92-Cx.6] Government of India Ministry of Finance (Department of Revenue) Central Board of Excise Customs, New Delhi Subject : Time period for finalisation of Adjudication - Regarding. The Trade has been represented in the meeting of the 33rd Advisory Council that they are facing problems due to the inordinate delays in the adjudication of cases. The Board's D.O.F.No.223/8/85-CX.6, dated 21-3-1985 had already stipulated a maximum period of 6 months from the date of issue of show cause notice within which the case is to be decided. It may be ensured that, as far as possible, this limit is adhered to. 2. The above instructions should be brought to the notice of the Trade and field formations through appropriate Trade Notices and circulars. 15. In the aforesaid circular, it is clearly stated that the Board's D.O.F.No.223/8/85-CX.6, dated 21-3-1985 had already stipulated a maximum period of 6 months from the date of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gitization of all papers connected with adjudication and litigation matters. 6. Any other suggestion in this regard may be forwarded to this office. 7. The above should be brought to the notice of the field formations under your charge for scrupulous compliance. 17. By virtue of the aforesaid circular, the respondents had viewed the matter seriously and therefore, instructed all the adjudicating authorities to pass adjudication orders within the time limit as prescribed so that the above said mistake will not repeat in future. 18. In the present case, the reasons provided by the respondents was that the present matter was kept in the call book and therefore, there was a delay in completing the adjudication process. On this aspect, a Division Bench of the Bombay High Court in the case in Raymond Ltd. v. Union of India [2019 (368) ELT 481 (Bom.)] has passed a detailed order and the relevant portions are extracted hereunder: 6. We specifically asked Mr. Jetly, Learned Counsel appearing for the Revenue, whether any intimation was given to the petitioners either in 2001 or in 2013 that the show cause notices are being kept in the call book and the reason for it i.e. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is that in absence of any period of limitation, it is required that every Authority is to exercise the power within a reasonable period. 8. Further, this Court in the case of M/s.Sanghvi Reconditioners (supra) had occasion to consider an identical submission as made before us by the Revenue i.e. show cause notices had been kept in the call book as an identical challenge in case of another assessee was pending in the Hon'ble Supreme Court. This defence on the part of the Revenue was negatived by the Court. This on the ground that accepting such a stand on behalf of the Revenue would defeat the rule of law itself. In fact, the Court noted as under :- 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 proceedings. That is equally a balancing factor in the facts and circumstances of the present case. 9. In the present facts, it is the case o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of the petitioners that the show cause notices are still alive and would be subject to adjudication after 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. 11. Therefore, it was reasonable for the petitioners to proceed on the basis that the department was not interested in prosecuting the show cause notices and had abandoned it. These proceedings are now being commenced after such a long gap, after having led the petitioner to reasonably expect that the proceedings are dropped. Therefore, even if, notices can be kept in the call book to avoid multiplicity of the proceedings, yet the principle of natural justice would require that before the notices are kept in the call book, or soon after the petitioners are informed the status of the show cause notices so as to put the parties to notice that the show cause notices are still pending. Giving notices for hearing after gap of 17 years, as in this case, is to catch the parties by surprise and prejudice a fair trial, as the documents relevant to the show-cause notices are not available with ..... X X X X Extracts X X X X X X X X Extracts X X X X
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