9911796707
TMI Blog2024 (12) TMI 624X X X X Extracts X X X X X X X X Extracts X X X X ..... (Stay), - - X X X X Extracts X X X X X X X X Extracts X X X X ..... missioner, Central Goods And Services Tax Audit-II, Delhi, Commissioner of CGST And Central Excise, Principal Commissioner Inland Container & Anr. For the Petitioner Through: Mr. Prem Ranjan Kumar, and Ms. Poojan Malhotra, Advocates., Mr. Sunil Dalal, Sr. Adv. with Ms. Shikha Sapra, Mr. Piyush Kumar, Ms. Reena Rawat, Mr. Nikhil Beniwal, Mr. Navish Bhati, Mr. Mahabir Singh, Mr. Archit Jindal and Mr. Akash Gupta, Advs., Mr. V.V. Gautam, Ms. Nitu Barik, Ms. Priya Bhatia, Advs. Dr. Prabhat Kumar and Mr. Karan Kanwal, Advs., Mr. T.P.S. Kang, Md. Zunaid and Mr. Mohek Gupta, Advs. Mr. Arjun Raghavendra and Mr. Piyush Deshpande, Advs., Mr. Deepak Gandhi, Mr. Sumit Kumar Jha and Mr. Ricky Chaudhary, Advs., Mr. J.K. Mittal, Ms. Vandana Mittal and Mr. Mukesh Chaudhary, Advs., Mr. Ravi Kant Chandok, Mr. Umesh Sarwal, Mr. Vasudev Lalvani, Mr. Tushar Sahni and Mr. Siddharth Sarwal, Advs., Mr. Sparsh Bhargava, Ms. Ishita Farsaiya and Ms. Vanshika Taneja, Advs., Mr. Abhas Mishra and Ms. Neha Singhal, Advs. Mr. A.K. Prasad, Mr. K.K. Anand, Ms. Surabhi Sinha, Mr. Prem Ranjan, Ms. Aakriti Anand and Ms. Sweety Gangmei, Advs., Mr. Tarun Gulati, Sr. Adv. with Ms. Shruti Kulkarni, Mr. Suresh Varanasi, M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the adjudication proceedings with the writ petitioners contending that the failure on the part of the respondents to conclude adjudication within a reasonable period of time and inordinately delaying the same for decades together would constitute a sufficient ground to annul those proceedings. They would contend that the principles of a 'reasonable period' which courts have propounded in connection with an adjudicatory function conferred upon an authority would apply and the impugned SCNs' and orders are liable to be quashed on this short score alone. 3. Insofar as the writ petitions pertaining to the Customs Act are concerned, the petitioners also seek to draw sustenance from certain statutory amendments that came to be introduced by virtue of Finance Act, 2018 [2018 Act] and in terms of which the phrase "where it is possible to do so", as previously occurring in Section 28 (9) came to be omitted. The 2018 Act also saw the insertion of a Second Proviso to Section 28 (9) and which provided that in case of a failure to conclude adjudication proceedings even within the extended period, would trigger a legal fiction of it being presumed that the SCN had never been issued. The other ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ith the aforenoted judgments as well as the statutory amendments which came to be introduced in the latter part of this decision, suffice it to note that according to the respondents, the delay in adjudication was neither deliberate nor designed. According to them, it was the aforementioned intervening factors that led to the SCN proceedings not being concluded with desired expedition. II. THE STATUTORY FRAMEWORK 8. Having broadly noticed the principal submissions which were addressed by respective sides, this would constitute an appropriate juncture to notice the salient provisions of the three principal statutes with which the impugned adjudication proceedings are concerned. 9. Insofar as the Customs Act is concerned, while undisputedly the exporter or the importer, as the case may be, stands enabled to follow the route of self-assessment and declaration, those once endorsed are undoubtedly liable to be viewed as having been duly assessed in accordance with the provisions of that statute. Section 28 of the Customs Act is concerned with duties and interest that may have been either not levied, paid, short-levied, short-paid, or erroneously refunded. It also extends to instances ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, has been paid in full within thirty days from the date of receipt of the notice, no penalty shall be levied and the proceedings against such person or other persons to whom the said notice is served under clause (a) of sub-section (1) shall be deemed to be concluded.] (3) Where the proper officer is of the opinion that the amount paid under clause (b) of sub-section (1) falls short of the amount actually payable, then, he shall proceed to issue the notice as provided for in clause (a) of that sub-section in respect of such amount which falls short of the amount actually payable in the manner specified under that sub-section and the period of [two years] shall be computed from the date of receipt of information under sub-section (2). (4) Where any duty has not been [levied or not paid or has been short-levied or short-paid] or erroneously refunded, or interest payable has not been paid, part-paid or erroneously refunded, by reason of,- (a) collusion; or (b) any wilful misstatement; or (c) suppression of facts, by the importer or the exporter or the agent or employee of the importer or exporter, the proper officer shall, within five years from the relevant date, serve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r tribunal in respect of payment of such duty or interest shall be excluded. [(7-A) Save as otherwise provided in clause (a) of sub-section (1) or in sub-section (4), the proper officer may issue a supplementary notice under such circumstances and in such manner as may be prescribed, and the provisions of this section shall apply to such supplementary notice as if it was issued under the said sub-section (1) or sub-section (4).] (8) The proper 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 or interest due from such person not being in excess of the amount specified in the notice. (9) The proper officer shall determine the amount of duty or interest under sub-section (8),- (a) within six months from the date of notice, [* * *], in respect of cases falling under clause (a) of sub-section (1); (b) within one year from the date of notice, [* * *], in respect of cases falling under sub-section (4): [Provided that where the proper officer fails to so determine within the specified period, any officer senior in rank to the proper officer may, ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l, for the reason that the charges of collusion or any wilful mis-statement or suppression of facts to evade duty has not been established against the person to whom such notice was issued and the amount of duty and the interest thereon shall be computed accordingly.] [(11) Notwithstanding anything to the contrary contained in any judgment, decree or order of any court of law, tribunal or other authority, all persons appointed as Officers of Customs under sub-section (1) of Section 4 before the 6th day of July, 2011, shall be deemed to have and always had the power of assessment under Section 17 and shall be deemed to have been and always had been the proper officers for the purposes of this section.] Explanation 1.-For the purposes of this section, "relevant date" means,- (a) in a case where duty is [not levied or not paid or short-levied or short-paid], or interest is not charged, the date on which the proper officer makes an order for the clearance of goods; (b) in a case where duty is provisionally assessed under Section 18, the date of adjustment of duty after the final assessment thereof or re-assessment, as the case may be; (c) in a case where duty or interest has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be initiated culminates in a determination of the duty leviable and recovered in accordance with the Section 28(3) and in terms of which the proper officer would compute the amount of duty or interest, which according to it, had either escaped being levied or had been short-levied or short-paid. 11. Section 28, by virtue of sub-section (4), thereafter proceeds to construct and lay in place a similar procedure where the allegation of duty having escaped levy or having been short-levied, short-paid or erroneously refunded, occurred by virtue of collusion, wilful misstatement or suppression of facts. Hereto, the proper officer, upon formation of an opinion that sub-section (4) would be attracted, is obliged to issue a notice calling upon the importer or exporter to pay the amounts that may be specified therein. Where proceedings are referable to Section 28 (4), and in cases where the allegation of collusion, wilful misstatement or suppression of facts be contested, the proper office would proceed to undertake a determination of the duty or interest payable in terms contemplated under Section 28 (6). 12. While the action referable to Section 28 (1) can be initiated within two year ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... taining to a period prior to the date when Finance Bill, 2011 received the assent of the President, would be governed by Section 28 as it stood before the date on which such assent was received. Of equal significance is Explanation 4, and which prior to the shape in which it exists presently in the statute and prior to the introduction of amendments by virtue of the Finance Act, 2020 [2020 Act], had read as follows: "Explanation 4.-For the removal of doubts, it is hereby declared that in cases where notice has been issued for non-levy, not paid, short-levy or short-paid or erroneous refund after the 14th day of May, 2015, but before the date on which the Finance Bill, 2018 receives the assent of the President, they shall continue to be governed by the provisions of Section 28 as it stood immediately before the date on which such assent is received." 16. Explanation 4 as it exists now, and which came to be recast with retrospective effect from 29 March 2018 as per the provisions of the 2020 Act, provides that notwithstanding any judgment, decree or order, any notice pertaining to non-levy, short-levy or erroneous refunds, issued prior to 29 March 2018 (the date of commencement of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... twithstanding anything contained in sub-section (1), in a case where the amount of service tax payable has been self-assessed in the return furnished under sub-section (1) of Section 70, but not paid either in full or in part, the same shall be recovered along with interest thereon in any of the modes specified in Section 87, without service of notice under sub-section (1).] (2) The [Central Excise Officer] shall, after considering the representation, if any, made by the person on whom notice is served under sub-section (1), determine the amount of service tax due from, or erroneously refunded to, such person (not being in excess of the amount specified in the notice) and thereupon such person shall pay the amount so determined: [* * *].] [(2-A) Where any appellate authority or tribunal or court concludes that the notice issued under the proviso to sub-section (1) is not sustainable for the reason that the charge of,- (a) fraud; or (b) collusion; or (c) wilful mis-statement; or (d) suppression of facts; or (e) contravention of any of the provisions of this Chapter or the rules made thereunder with intent to evade payment of service tax, has not been established ag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sions of this chapter or of the rules made thereunder with intent to evade payment of service tax. (4-A) [* * *] [(4-B) The Central Excise Officer shall determine the amount of service tax due under sub-section (2)- (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 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 (4-A).] (5) The provisions of sub-section (3) shall not apply to any case where the service tax had become payable or ought to have been paid before the 14th day of May, 2003. (6) For the purposes of this section, "relevant date" means,- (i) in the case of taxable service in respect of which service tax has not been levied or paid or has been short-levied or short-paid- (a) where under the rules made under this chapter, a periodical return, showing particulars of service tax paid during the period to which the said return relates, is to be filed by an assessee, the date on which such return is so filed; (b) where no periodical return as aforesaid is filed, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... months prior to the time limit specified in sub-section (10) for issuance of order. (3) Where a notice has been issued for any period under sub-section (1), the proper officer may serve a statement, containing the details of tax not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilised for such periods other than those covered under sub-section (1), on the person chargeable with tax. (4) The service of such statement shall be deemed to be service of notice on such person under sub-section (1), subject to the condition that the grounds relied upon for such tax periods other than those covered under sub-section (1) are the same as are mentioned in the earlier notice. (5) The person chargeable with tax may, before service of notice under sub-section (1) or, as the case may be, the statement under sub-section (3), pay the amount of tax along with interest payable thereon under Section 50 on the basis of his own ascertainment of such tax or the tax as ascertained by the proper officer and inform the proper officer in writing of such payment. (6) The proper officer, on receipt of such information, shall not serve any notice under sub-section ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot been so paid or which has been so short paid or to whom the refund has erroneously been made, or who has wrongly availed or utilised input tax credit, requiring him to show cause as to why he should not pay the amount specified in the notice along with interest payable thereon under Section 50 and a penalty equivalent to the tax specified in the notice. (2) The proper officer shall issue the notice under sub-section (1) at least six months prior to the time limit specified in sub-section (10) for issuance of order. (3) Where a notice has been issued for any period under sub-section (1), the proper officer may serve a statement, containing the details of tax not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilised for such periods other than those covered under sub-section (1), on the person chargeable with tax. (4) The service of statement under sub-section (3) shall be deemed to be service of notice under sub-section (1) of Section 73, subject to the condition that the grounds relied upon in the said statement, except the ground of fraud, or any wilful-misstatement or suppression of facts to evade tax, for periods other than those cov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... notice" shall not include proceedings under Section 132; (ii) where the notice under the same proceedings is issued to the main person liable to pay tax and some other persons, and such proceedings against the main person have been concluded under Section 73 or Section 74, the proceedings against all the persons liable to pay penalty under [Sections 122 and 125] are deemed to be concluded. Explanation 2.-[* * *]" 20. We have chosen to extract those provisions for the sake of completeness and notwithstanding the petitioners asserting that by virtue of Section 174(2) of the CGST Act, and which constitutes the 'Repeal and Saving' clause, it would be the provisions of the 1994 Act which would govern. 21. In terms of Section 73 (1) of the CGST Act, which is principally concerned with cases other than where allegations of fraud, wilful misstatement or suppression of facts are made, and pertains to tax incorrectly computed, erroneously refunded or benefits wrongly availed, sets out terminal points within which action referable to that provision would have to be commenced and concluded. A final order on the culmination of adjudication is liable to be framed by the proper officer in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by either the Board or the Commissioner of Customs, in terms of Section 2 (34) of the Act is competent to issue notice under Section 28 of the Act. Any other reading of Section 28 would render the provisions of Section 2 (34) of the Act otiose inasmuch as the test contemplated under Section 2 (34) of the Act is that of specific conferment of such functions. 21. Moreover, if the Revenue's contention that once territorial jurisdiction is conferred, the Collector of Customs (Preventive) becomes a "proper officer" in terms of Section 28 of the Act is accepted, it would lead to a situation of utter chaos and confusion, inasmuch as all officers of Customs, in a particular area be it under the Collectorate of Customs (Imports) or the Preventive Collectorate, would be "proper officers". In our view, therefore, it is only the officers of Customs, who are assigned the functions of assessment, which of course, would include reassessment, working under the jurisdictional Collectorate within whose jurisdiction the bills of entry or baggage declarations had been filed and the consignments had been cleared for home consumption, will have the jurisdiction to issue notice under Section 28 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 23. If it was intended that officers of the Directorate of Revenue Intelligence who are officers of the Central Government should be entrusted with functions of the Customs Officers, it was imperative that the Central Government should have done so in exercise of its power under Section 6 of the Act. The reason why such a power is conferred on the Central Government is obvious and that is because the Central Government is the authority which appoints both the officers of the Directorate of Revenue Intelligence which is set up under the Notification dated 4-12-1957 issued by the Ministry of Finance and Customs Officers who, till 11-5-2002, were appointed by the Central Government. The notification which purports to entrust functions as proper officer under the Customs Act has been issued by the Central Board of Excise and Customs in exercise of non-existing power under Section 2 (34) of the Customs Act. The notification is obviously invalid having been issued by an authority which had no power to do so in purported exercise of powers under a section which does not confer any such power. xxxx xxxx xxxx 25. We, therefore, hold that the entire proceeding in the present case initi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oubts". It is made clear that non-levy, short-levy or erroneous refund prior to April 8, 2011 would be governed by section 28 "as it stood immediately before the date on which such assent is received". (iii) Section 28 (11), as it presently stands, was not in the statute book prior to April 8, 2011. Therefore, no reference can be made to section 28 (11) of the Act for determining not only the procedure but the very basis on which a non-levy, short-levy or erroneous refund occurring prior to April 8, 2011 should be dealt with. (iv) Prior to April 8, 2011 and even subsequent thereto, only a "proper officer" who has been "assigned" specific functions by the Central Board of Excise and Customs or the Commissioner as amended by section 2 (34) of the Act could undertake the task of non-levy, short-levy or erroneous refund. Therefore, for any non-levy, short-levy or erroneous refund prior to April 8, 2011, an officer of the customs who has not been specifically assigned such function in terms of the Act cannot exercise such power. (v) Section 28 (11), therefore, does not validate the show-cause notices issued by the Directorate of Revenue Intelligence, Directorate General of Central ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iod prior to April 8, 2011 have not been validated. 68. There is also merit in the contention of the petitioners that section 28 (11) confers validity only on "the proper officer". As explained in Consolidated Coffee Ltd. v. Coffee Board [1980] 46 STC 164 (SC), the use of article "the" as opposed to "an" or "any" is indeed significant. Only officers who have been assigned the functions of the "proper officer" for the purposes of section 17, i.e., assessment of the bills of entry can be considered as the proper officer for the purposes of section 28 (11) of the Act. As further explained in Ishar Alloy Steels Ltd. v. Jayaswals Neco Ltd. [2001] 105 Comp Cas 1 (SC), the article "the" always denotes a particular thing or person. 69. The court also finds merit in the contention that if jurisdiction is exercised by one officer of the customs or of the Directorate of Revenue Intelligence or Directorate General of Central Excise Intelligence, it should impliedly oust the jurisdiction of other officers over the same subject matter. The doctrine of comity of jurisdiction requires that for the proper administration of justice there should not be an overlapping of the exercise of powers and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... all other officers who may have the power in relation to that subject matter. The question as to the constitutional validity and effect of section 28 (11) of the Act is answered accordingly." The judgment rendered by our Court in Mangali Impex was subjected to challenge in Civil Appeal No. 6142/2019 before the Supreme Court and where in terms of an interim order dated 01 August 2016, the judgment was stayed. 26. More recently, the Supreme Court ruled on a review petition which had been filed by the Revenue and in terms whereof the correctness of the judgment in Canon I was urged to be reconsidered. That review petition ultimately came to be allowed in Commr. Of Customs vs. Canon India (P) Ltd. 2024 SCC OnLine SC 3188; Canon II with the Supreme Court observing as follows: "F. CONCLUSION 168. In view of the aforesaid discussion, we conclude that: (i) DRI officers came to be appointed as the officers of customs vide Notification No. 19/90-Cus (N.T.) dated 26.04.1990 issued by the Department of Revenue, Ministry of Finance, Government of India. This notification later came to be superseded by Notification No. 17/2002 dated 07.03.2002 issued by the Department of Revenue, Mini ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the decision in Canon India (supra) to the extent that it pertains to the first ground, that is, the jurisdiction of the DRI officers to issue show cause notices under Section 28. We clarify that the observations made by this Court in Canon India (supra) on the aspect of limitation have neither been considered nor reviewed by way of this decision. Thus, this decision will not disturb the findings of this Court in Canon India (supra) insofar as the issue of limitation is concerned. (iv) The Delhi High Court in Mangali Impex (supra) observed that Section 28 (11) could not be said to have cured the defect pointed out in Sayed Ali (supra) as the possibility of chaos and confusion would continue to subsist despite the introduction of the said section with retrospective effect. In view of this, the High Court declined to give retrospective operation to Section 28 (11) for the period prior to 08.04.2011 by harmoniously construing it with Explanation 2 to Section 28 of the Act, 1962. We are of the considered view that the decision in Mangali Impex (supra) failed to take into account the policy being followed by the Customs department since 1999 which provides for the exclusion of jurisdi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tore such notices for adjudication by the proper officer under Section 28. b. Where the writ petitions have been disposed of by the respective High Court and appeals have been preferred against such orders which are pending before this Court, they shall be disposed of in accordance with this decision and the show cause notices impugned therein shall be restored for adjudication by the proper officer under Section 28. c. Where the orders-in-original passed by the adjudicating authority under Section 28 have been challenged before the High Courts on the ground of maintainability due to lack of jurisdiction of the proper officer to issue show cause notices, the respective High Court shall grant eight weeks' time to the respective assessee to prefer appropriate appeal before the Customs Excise and Service Tax Appellate Tribunal (CESTAT). d. Where the writ petitions have been disposed of by the High Court and appeals have been preferred against them which are pending before this Court, they shall be disposed of in accordance with this decision and this Court shall grant eight weeks' time to the respective assessee to prefer appropriate appeals before the CESTAT. e. Where ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ocess of placing open and unresolved cases pertaining to adjudication in the call book. The placement of matters in the call book was in line with instructions issued by the Board from time to time requiring adjudicating authorities to place pending adjudication proceedings in abeyance, some of which had been placed for our perusal. One of the earliest of those instructions to which our attention was drawn is dated 29 June 2016 and reads thus: "INSTRUCTION F.NO.276/104/2016-CX.8A (PT.) INCLUSION OF SHOW CAUSE NOTICES ISSUED IN RELATION TO SECTION 28 (11) OF CUSTOMS ACT, 1962 ON COMPETENCY OF OFFICERS OF DGDRI, DGCEI AND CUSTOMS (PREV.), IN CALL BOOK INSTRUCTION F.NO.276/104/2016-CX.8A (PT.), DATED 29-6-2016 The Hon'ble High Court of Delhi vide the order dated 3-5-2016 in the case of Mangali Impex Ltd. in WP No. 441/2013 and others held that sub-section (11) of section 28 of the Customs Act, 1962 cannot validate SCNs or proceedings pursuant thereto in relation to non-levy, short-levy or erroneous refund for the period prior to 8th April 2011, if such SCNs have been issued or proceedings conducted by officers of the Customs, DGDRI or DGCEI or as in the present case by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... your office drawing attention to the judgment dated 09.03.2021 of the Hon'ble Supreme Court in Civil Appeal No. 1827 of 2018 in the case of M/s Canon India Private Limited vs Commissioner of Customs. Vide the said judgement, the Hon'ble Apex Court has ruled that the Additional Director General (ADG) of Directorate of Revenue Intelligence (DRI) is not the proper officer to issue Show Cause Notice (SCN) under sub-section (4) of section 28 of the Customs Act, 1962. The Apex Court has concluded that the entire proceeding in the present case initiated by ADG (DRI) by issuing SCN, as invalid and without any authority of law. The Apex Court has accordingly set aside the subject SCN. 2. Further, attention is drawn to the specific reference for seeking Board's direction with respect to SCN dated 19.03.2019 against Sh. Anil Aggarwal and 11 others where the adjudication of the SCN would get barred by the limitation of time on 18th March, 2021 under sub-section (9) of section 28 of the Customs Act, 1962, on account of the inability to proceed further due to the said judgement of the Hon'ble Supreme Court. 3. The matter has been examined. The implications of the said judgement are under act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y delayed since the petitioner repeatedly requested for Relied Upon Documents [RUD] to be provided in the course of the personal hearings which were held. 32. However, and as is manifest from the record, although the SCN was originally issued on 22 December 2006 it came to be transferred to the call book for the first time only on 29 June 2016, the respondents have failed to proffer any explanation for this delay of almost 10 years even though no restraint operated upon the right of the authorities to finalize the adjudication during this period. 33. Another case which emanates from the Customs Act is W.P.(C) 12425/2023 and where the SCN is dated 20 December 2012. In this case also the proceedings are yet to be concluded. As per the disclosures made by the respondents, in terms of an order of the Board dated 31 January 2013, the SCN proceedings were assigned to the Commissioner of Customs, ICD-Tughlakabad. Thereafter, the Additional Director General of the DRI was appointed as the Common Adjudicating Authority on 12 January 2016 and the proceedings were thus transferred from the Commissioner of Customs, ICD-Tughlakabad to the Additional Director General of the DRI on 14 June 2016 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9 November 2019 and thus after amendments had come to be introduced in Section 28 by virtue of the 2018 Act. The proceedings in that case are still to see a conclusion. In fact, and as per the respondents, supplementary SCNs' came to be issued in that matter on 20 April 2020 and 18 September 2020. The adjudication proceedings were initially transferred to the call book on 01 April 2021 premised on the instructions of the Board dated 17 March 2021 and which are sought to be sustained on the anvil of Section 28 (9-A) (c) of the Customs Act. According to the respondents, the statement of an advocate connected with the investigation was recorded on 15 September 2020 and dates for personal hearing fixed on 07 April 2020, 29 July 2020 and 15 September 2020. The respondents additionally rely upon the order passed by the Supreme Court in In Re: Cognizance For Extension Of Limitation Suo Motu W.P.(C) 3/2020 dated 08 March 2021 and the exclusion of the period between 15 March 2020 to 15 March 2022 to explain their inaction. 38. The last of the cases emanating from the Customs Act which we propose to notice is that of W.P.(C) 15971/2023 and where proceedings were initiated pursuant to a SCN ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . UOI 2020 SCC OnLine Bom 8678. Here, the proceedings were originally commenced in terms of SCNs' issued in 2006 and whereafter proceedings went into a limbo. They were sought to be revived for the first time after almost 13 years. It was in the aforesaid backdrop that the High Court formulated the relevant issue to be whether a delayed adjudication could be sustained. While dealing with this aspect the Bombay High Court held as follows: "19. Way back in 1983, this court in Bhagwandas S. Tolani v. B. C. Aggarwal (1983) 12 ELT 44 (Bom) 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-cause notice was issued, which could not be permitted. The position would have been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. P. 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 v. Citedal Fine Pharmaceuticals 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. In the case of Lanvin Synthetics P. Ltd. (2015) 322 ELT 429 (Bom) 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 March 28, 2002. The petitioners forwarded their reply to the show-cause notice after receipt thereof on September 14, 2002. Concededly, there was a hearing in the year, 2004. 17. The first affidavit-in-reply filed in this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nable 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 proceedings. That is equall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 P. Ltd. (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 not available. Thus, seriously hampering the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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."" 42. The Bombay High Court after noticing the various judgments which had explained and laid emphasis upon adjudication proceedings being liable to be concluded within a reasonable period, observed that undue delay would be sufficient to annul the entire adjudication itself. Since the respondents there had failed to provide any explanation for the adjudication proceedings having remained pending for almost 13 years and the delay not being attributable to any action of the writ petitioner, the Court ultimately held as follows: "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 of more than a decade defeats the very purpose of issuing show-cause notice. When a show-cause no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eedings initiated under the 1994 Act and was thus rendered in the backdrop of Section 73 (4B) and which undisputedly obliges the competent authority to complete the determination process within one year from the date of issuance of notice, "where it is possible to do so". Notwithstanding the permissive interpretation that was canvassed on behalf of the respondents in light of the statutory provision adopting the aforenoted phraseology, our Court held that even where the statute fails to provide or stipulate a particular period, it would be the principles of reasonable time which would apply. This becomes evident from a reading of the following passages of that decision: "19. It is settled law that where there is no period stipulated for exercising jurisdiction, the same must be done within a reasonable period. In Union of India v. Citedal Fine Pharmaceuticals [Union of India v. Citedal Fine Pharmaceuticals, (1989) 3 SCC 483 : 1989 SCC (Tax) 464], the Supreme Court had observed as under: (SCC p. 487, para 6) "6. Learned counsel appearing for the respondents urged that Rule 12 is unreasonable and violative of Article 14 of the Constitution, as it does not provide for any period o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d with reference to the facts in a given case. And, in the present case, the reasonable period was required to be determined considering the "call book" procedure. Respondent 1 had resumed the proceedings immediately after finding that the matter was no longer required to be kept in abeyance (in the, "call book")." 44. The aspect of matters being placed in the call book also appears to have arisen for notice of the Court. While dealing with the procedure as adopted by the respondents of placing matters repeatedly in the call book, the Court in Nanu Ram Goyal I observed as follows: "22. The respondents state that Respondent 1 had placed the matter in the, "call book" in terms of the CBEC Circular dated 26-5-2003 (Circular No. 719-35-2003-CX). The aforementioned circular indicates that it had reiterated the instructions issued in the earlier Circular No. 53 of 1990-CX, dated 6-9-1990 and Circular No. 162-73-1995-CX, dated 14-12-1995; furthermore, directing that the Chief Commissioner should monitor the progress of disposal of the "call book" cases to ascertain whether the "call book" cases have been reviewed by the Commissioner of Central Excise; whether any appreciable progress h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as empowered to issue circulars under Section 37-B of the Excise Act, 1944. Thus, the concept of the "call book" could not be traced to Section 37-B of the Excise Act, 1944 or any other provisions of the said Act. The Gujarat High Court reiterated the aforesaid view in Shree Shakambari Silk Mills v. Union of India [Shree Shakambari Silk Mills v. Union of India, 2017 SCC OnLine Guj 2496]. 27. This court is informed that the question as to the validity of the "call book" procedure is pending consideration before the Supreme Court in a batch of matters. It is stated that the Revenue had preferred an appeal against the decision of the Gujarat High Court in Siddhi Vinayak Syntex (P) Ltd. case [Siddhi Vinayak Syntex (P) Ltd. v. Union of India, 2017 SCC OnLine Guj 2609], however, the said appeal was disposed of by an order dated 18-2-2022 in Union of India v. Siddhi Vinayak Syntex (P) Ltd. [Union of India v. Siddhi Vinayak Syntex (P) Ltd., 2022 SCC OnLine SC 1818] on account of the low tax effect albeit with a clarification that if the assessee chose to raise any grounds regarding the "call book" regime, the assessee would have to await the outcome of the proceedings pending in the Supr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oner, GST And Central Excise Commissionerate II, & Ors. vs. M/s Swati Menthol and Allied Chemicals Ltd & Anr. SLP (C) No. 20072/2021 dated 10 July 2023, and which was pressed into aid before us in these proceedings, appears to have been cited for the consideration of the Court. The Court, however, pertinently observed that Swati Menthol turned on its own peculiar facts and thus would not detract from the correctness of the view which had been expressed in the original judgment. The review petition came to be dismissed in the following terms: "1. Respondent no.1/ review petitioner (hereafter Revenue) has filed the present review petition seeking review of the judgment dated 18.04.2023 passed by this Court. 2. Mr. R. Ramachandran, learned counsel appearing for the Revenue has referred to the decision of the Supreme Court in Commissioner, GST and Central Excise Commissionerate II & Ors. v. M/s Swati Menthol & Allied Chemicals Ltd. & Anr., SLP(C) No. 20072 of 2021 dated 10 July, 2023, wherein the Supreme Court had accepted the Revenue's contention that the matters be remitted to the Adjudicating Authority (Commissioner of GST) to conclude the proceedings within a period of eight we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d on merits." 47. A detailed decision with respect to the imperatives of adjudication being concluded with due expedition and the validity of the call book procedure arose for consideration of the High Court of Jharkhand in Tata Steel Limited vs. Union of India & Ors. W.P.(T) 826/2023 dated 13 June 2023. The Jharkhand High Court too was dealing with a batch of writ petitions which had questioned the continuance of adjudication proceedings decades after the original SCNs' had been issued. It appears that the validity of placement of matters in the call book was considered in extenso in another writ petition and the order passed thereon having been duly considered by the Division Bench in Tata Steel. This becomes evident from a reading of paragraph 13 of the judgment, and which is extracted hereinbelow: "13. Having heard learned counsel for the parties and after going through the documents available on record and the averments made in the respective affidavits and also the order passed by this Court in W.P.(T) No. 308 of 2023, it appears that the issue involved in these cases is squarely covered. For brevity relevant portion of the judgment passed in W.P.(T) No. 308 of 2023 is quo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that case by the Apex Court on 5th May 2004. None of the other two conditions as indicated by the respondents at Clause 3 and 4 quoted above also stand satisfied in the present case. The respondents have not enclosed any document to show that prior approval of the Collector of excise was taken before keeping the case in the call book. There seems to be no reference of any periodic review of the call book, though the relevant CBIC circulars such as the circular dated 30th March 1998 and 20th May 2003 specifically required the Commissioners to review the cases transferred to call books on a monthly basis in circumstances where the department was confronted with a situation where provisional assessment cases were kept pending for several years. The extract of the relevant circulars are quoted here under :- In circular dated 30th March 1998 : "While the Board had issued instructions to Commissioners to review the cases transferred to call books on a monthly basis, it is observed that no such review is actually being done. (Board's DO Letter F.No.101/2/92-CX.3, dated 4th March 1992 and Board's Circular No. 53/90-CX.3, dated 6.9.1990). 2. The Board vide its < > specified the follo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ring the course of any audit, investigation or verification, it is found that any duty [has not been levied or paid or has been] short-levied or short-paid or erroneously refunded for the reason mentioned in clause (a) or clause (b) or clause (c) or clause (d) or clause (e) of sub-clause (4) but the details relating to the transactions are available in the specified records, then in such cases, the Central Excise Officer shall within a period of five years from the relevant date, serve a notice on the person chargeable with the duty requiring him to show cause why he should not pay the amount specified in the notice along with interest under section 11AA and penalty equivalent to fifty per cent of such duty. xxx xxx xxx (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 year [substituted for one year w.e.f. 14-05-2016] from the date of notice, where it is possible to do so, in respect of cases falling under the proviso to sub-section (4) or subsection (5)]. xxx xxx xxx 20. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ified delay in adjudication of the show cause notice is in contravention of procedural fairness and is violative of principles of natural justice. 16. We find sufficient merit in the submissions made on behalf of the Petitioner that delay in adjudication of the show cause notice constitutes breach of principle of natural justice. In the present case, show cause notice issued in the year 2013 was replied by the Petitioner well within time in the year 2014 itself. The Petitioner 14 has specifically pleaded that the previous Director of the Petitioner, who was looking after the day to day management including the import of goods expired on 19th May 2019 and that no other person was aware about the proceedings of the show cause notice. There is no dispute that the Petitioner was never intimated with respect to adjudication on the show cause notice or the same being kept in the call book. Learned counsel for the Petitioner is right in contending that the Petitioner is gravely prejudiced as the Respondents never informed the Petitioner about the show cause notice being kept in the call book and that due to passage of time the relevant papers may not be available and it will not be poss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pugned show-cause notice dated 9th December 1993 is quashed. The notices of personal hearing dated 30th November 2022 and 23rd December 2022 are also quashed. 23. The writ petition is allowed in the manner and to the extent indicated herein above. Pending interlocutory application seeking stay is closed." 48. Since the aspect of transferring matters to the call book appears to have been reagitated, that High Court in Tata Steel after reviewing various judgments rendered by different High Courts including the decisions of our Court in Nanu Ram Goyal I & II held as follows: "18. The respondents have also again tried to rake up the issue of transfer of such notices (SCN) to call book, when such issue has been authoritatively decided by this Court in W.P.(T) No. 308 of 2023. The file notings brought on record by the respondent also does not help them in any manner; rather, it only justifies the order passed by this Court that there existed no circumstances for transfer of cases to the call book as per the circulars issued by the department itself. In this regard we observe that there is no justification/reasoning either in the counter affidavit or the file notings as to why the sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dity of the procedure of placing the matter in the 'Call Book' as it is apparent that there is a gross delay on the part of respondent no. 1 and there are no justified reasons for the same. 20. The Respondents have also stated that the Department has decided to approach the Hon'ble Supreme Court against the judgment dated 14.2.2023 rendered in W.P.(T) No. 308 of 2023. It is however submitted by the learned ASGI that no such Special Leave Petition has been filed as on date. Even otherwise, mere filing of any Special Leave Petition does not amount to a stay of the order of the High Court. The order of the High Court must be given effect to until and unless the same is stayed by an order of the Hon'ble Supreme Court. This is well settled by the judgment rendered in the case of Kunhayammed v. State of Kerala, (2000) 6 SCC 359 - Paras 14 (4) and 28 are quoted hereinbelow:- 14 ....(4) In spite of a petition for special leave to appeal having been filed, the judgment, decree or order against which leave to appeal has been sought for, continues to be final, effective and binding as between the parties. Once leave to appeal has been granted, the finality of the judgment, dec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... endency of appeal reopens the issues decided and this Court is then scrutinising the correctness of the decision in exercise of its appellate jurisdiction. xxxx xxxx xxxx 23. Having regard to the aforesaid discussions and judicial pronouncements and also the fact that the issue involved in these writ applications has already been decided by this Court in W.P.(T) No.308 of 2023, we are having no hesitation in quashing the respective show cause notices (SCN) and Notice of personal hearing as mentioned in paragraph No.3 in tabular form and subsequent OIO i.e. common Order in Original dated 17.02.2023. The same are hereby quashed and set aside." 49. We then proceed to notice some judgments which have come to be rendered by our High Court in recent times. The first of those decisions which bear relevance to the issue which stands raised is in the matter of Swatch Group India (P) Ltd. vs. Union of India 2023 SCC OnLine Del 4938. One of the contentions which appears to have been urged for the consideration of the Court therein was the validity of the SCN proceedings being liable to be examined in the backdrop of the unamended Section 28 of the Customs Act. The Court in Swatch Group p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as vehemently contended that the amendment carried out in section 28 of the Customs Act is only procedural and applying the principles of retroactive amendment, the respondent was bound to pass an order within 12 months of coming into force the amendment to section 28 (9) of the Customs Act. He relied upon the judgment passed by the honourable High Court of Punjab and Haryana in the case of Harkaran Dass Vedpal v. Union of India CWP No. 10889 of 2017, decided on July 22, 2019. 29. We do not agree with the aforesaid contention advanced on behalf of learned counsel for the petitioner. Pursuant to the judgment passed by the Punjab and Haryana High Court in Harkaran Dass Vedpal [Harkaran Dass Vedpal v. Union of India (CWP No. 10889 of 2017, decided on July 22, 2019 (P&H)).], a further amendment was carried out by a Finance Act, 2020 dated March 27, 2020. The same, came into effect retrospectively from March 29, 2018. By the Finance Act, 2020, the Explanation 4 to section 28 of the Customs Act was substituted and the same reads as under: "Explanation 4.- For the removal of doubts, it is hereby declared that notwithstanding anything to the contrary contained in any judgment, decree o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... prove that it was not practicable or possible to follow the rule. The same is to be adjudicated on the facts and circumstances of each case. 34. The flexibility, at the same time, in our opinion, cannot be equated with the lethargy of the Department or its officers. The Legislature has mandated the show-cause notices to be adjudicated within six months or one year as the case may be; it has provided flexibility only to the extent that if the same is not practicable/possible the period can be extended. The phrase "where it is possible to do so" would only mean that wherever it is not practicable/possible to do certain act, the period can be extended. The same, however, cannot be an endless period without any plausible justification." 50. In support of its conclusion rendered in the backdrop of the unamended Section 28, the Court also had an occasion to consider the judgment rendered by our High Court in Sunder System (P) Ltd. vs. Union of India 2019 SCC OnLine Del 12137 and which was concerned with Section 73 (4B) of the 1994 Act. The Division Bench in this respect observed as follows: "35. This court in Sunder Systems Private Limited [Sunder System Pvt. Ltd. v. Union of India, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... determined. xxxx xxxx xxxx 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 indeterminate period of time. The Legislature in its wisdom has provided a specific period for the authority to discharge its functions. The indifference of the concerned officer to complete the adjudication within the time period as mandated, cannot be condoned to the detriment of the assessee. Such indifference is not only detrimental to the interest of the taxpayer but also to the exchequer." 52. The question of delayed adjudication arose yet again in Gala International (P) Ltd. vs. Revenue Intelligence Directorate 2023 SCC OnLine Del 6073. Hereto the challenge was raised on the ground that the SCN proceedings had not been concluded despite almost 14 years having lapsed. The Court ultimately came to conclude that the adjudication proceedings would not sustain bearing in mind the view expressed in Nanu Ram Goyal I & II and Swatch Group. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hey were concerned solely with a group of assessees other than the writ petitioners. The second explanation which was proffered by the respondents' for the inordinate delay and was attributed to the flux in the legal position which prevailed in light of Canon I also came to be negated in light of the Court finding that the SCNs had in fact been issued by the competent jurisdictional Commissionerates as opposed to an officer of the DRI. 54. The Court then proceeded to take note of the significant amendments which had come to be introduced in Section 28 of the Customs Act by virtue of the 2018 Act and held as follows: "10. As would be evident from a reading of the aforesaid provision, sub-section (4) provides a window of five years from the relevant date within which proceedings under the said provision may be initiated. The proceedings so initiated are liable to be brought to a close in accordance with the statutory timelines which stand set out in sub-section (9). In terms of sub-section (9) and since the notice had been issued with reference to section 28 (4), the proceedings were liable to be brought to a close within one year from the date of the notice and in the facts of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have firstly alluded to the individual facts which prevail and valiantly sought to explain away the delay caused. It was also alleged that in most of the cases, the petitioners had failed to render cooperation in the adjudication proceedings and consequently, the delay cannot be attributed to the respondents. They also sought to rely upon the directives of the Board which had been issued from time to time to submit that those clearly bound the individual adjudicating authorities and that they were in terms thereof constrained to place matters in abeyance. 56. While we have already extracted the instructions dated 29 June 2016 and 17 March 2021 hereinabove, in order to evaluate and appreciate the submissions addressed by the respondents, it would also be pertinent to refer to two additional instructions dated 03 January 2017 and 03 November 2017 which are reproduced hereinbelow: "F. No. 276/104/2016-C.8A (Pt.) Ministry of Finance Department of Revenue Central Board of Excise & Customs (Legal Cell) ******* 'C' Wing, 5th Floor, HUDCO-VISHALA, Building Bhikaji Cama Place, R.K. Puram, New Delhi - 66: dted the 03.01.2017 Instruction To, 1. All Principal Chief Commissioners ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Owing to the judgement of the Hon'ble CESTAT in the said cases, remanding back the appeals to the concerned authorities to pass appropriate orders on the basis of the outcome of the Supreme Court in the Mangali Impex case. Adjudication Authorities are constrained not to pass orders, in such cases. 3. In the present scenario, Board is of the view that it would not be feasible to adhere to earlier instructions issued vide the said D.O. letter of the Member (CBEC) to carry out adjudication of SCNs pertaining to period prior to 08.07.2011. 4. Keeping in view of the above, undersigned is further directed to request you to take suitable further action and inform the field formations accordingly. (Anil Kumar Sapra) OSD (Customs-IV) Commissioner (legal), 5th Floor, Hudco Vishala Building, 'B' Wing, Bhikaji Cama Place, R.K. Puram, New Delhi." 57. As is evident from a reading of the instructions dated 29 June 2016, the same was prompted by the decision handed down by our Court in Mangali Impex. The aforenoted instruction acknowledges that notwithstanding the decision of the Supreme Court in Sayed Ali and the validating amendments introduced in Section 28, in light of the ch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lant Department is aggrieved by the impugned order dated 17.05.2021 by which the High Court has closed the proceedings initiated by virtue of two show cause notices dated 02.03.2010 and 06.05.2010 issued to the respondents proposing to demand the CENVAT credit availed by the respondent(s) during the period from April, 2005 to March, 2009 and further credit availed by the respondent(s) during April, 2009 to February, 2010. Pursuant to the issuance of the notices and on receipt of the same, the respondent(s) herein filed their replies to the show cause notices. 7. Thereafter, the matter was posted for personal hearing of the respondent(s) who were requested to appear for personal hearing before the Commissioner, Central GST Commissionerate, Chandigarh. However, the matter did not progress on several occasions on account of the respondents failure to appear before the said authority. Thereafter, by communication dated 10.10.2018, the respondents were informed that personal hearing, which was to take place had been adjourned sine die and the next date of hearing would be informed later. Since there was no further communication from the said Authority and three years had since passed, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 10. In the circumstances, we set aside the impugned order and we remand the matter to the Commissioner of GST (adjudicating Authority) with a direction to conclude the proceedings within a period of eight weeks from 10.08.2023. Since the respondent(s) is/are represented by learned counsel, the respondent(s) is/are directed to appear before the concerned Authority on that date (10.08.2023) without expecting any separate notices to be issued by the said Authority to the respondent(s) herein. 11. It is needless to observe that the Authority which is seized of the matter shall give adequate opportunity to both sides and conclude the proceedings within a period of eight weeks from 10.08.2023. 12. All contentions on both sides are left open, to be taken up before the concerned Authority. 13. The Appeal is allowed and disposed in the aforesaid terms. No costs. 14. Pending application(s) shall stand disposed." 61. It was on the basis of the aforenoted orders of the Supreme Court that learned counsels for the respondents sought to contend that delay in itself would not be sufficient ground to annul or interdict adjudication proceedings and that notwithstanding an assertion of an in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... only a customs officer who has been specifically assigned the duties of assessment and re-assessment in the jurisdiction area is competent to issue a notice for the demand of duty as a proper officer. As such the Commissioner of Customs (Preventive) who has not been assigned the function of a "proper officer" for the purposes of assessment or re-assessment of duty and issue of Show Cause Notice to demand customs duty under Section 17 read with Section 28 of the Act in respect of goods entered for home consumption is not competent to function as a proper officer which has not been the legislative intent. 2. In view of the above the Show Cause Notices issued over the time by the Customs Officers such as those of the Commissionerates of Customs (Preventive), Directorate General of Revenue Intelligence and others, who were not specifically assigned the functions of assessment and re-assessment of customs duty may be construed as invalid. The result would be huge loss of revenue to the exchequer and disruption in the revenue already mobilized in cases already adjudicated. However, having regard to the urgency of the matter, the Government issued notification on 6th July, 2011 specifi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t while ruling on the impact of Section 28 (11) in paragraph 61 firstly held as follows: "61. Keeping the above principles in mind when section 28 has been recasted by Act 8 of 2011 with effect from April 8, 2011 read with section 28 (11) which was introduced by the Customs (Amendment and Validation) Act, 2011 with effect from September 16, 2011, the position that emerges is as under : (i) Section 28 (11) states that all persons appointed as customs officers prior to July 6, 2011 will be deemed to always have had the power of assessment under section 17 and shall be deemed to always have been "proper officers". Further, this is notwithstanding anything to the contrary in any judgment, decree or order of any court of law. While the said provision is intended to overcome the defect pointed out in the decision of the Supreme Court in Sayed Ali [2011] 7 GSTR 338 (SC), section 28 (11) of the Act does not state that it would operate notwithstanding anything contained either in the Act or any other Act for the time being in force. In other words, the Legislature has not made it explicit that section 28 (11) would prevail notwithstanding anything contained in Explanation 2 to section 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Intelligence or Directorate General of Central Excise Intelligence, it should impliedly oust the jurisdiction of other officers over the same subject matter. The doctrine of comity of jurisdiction requires that for the proper administration of justice there should not be an overlapping of the exercise of powers and functions. The decision of the Punjab and Haryana High Court in Kenapo Textiles P. Ltd. v. State of Haryana [1992] 84 STC 88 (P&H) and the decision of the Supreme Court in India Household and Healthcare Ltd. v. LG Household and Healthcare Ltd. [2007] 136 Comp Cas 621 (SC) are relevant in this context. Conclusion on effect and validity of section 28 (11) 70. The net result of the above discussion is that the Department cannot seek to rely upon section 28 (11) of the Act as authorising the officers of the customs, Directorate of Revenue Intelligence, Directorate General of Central Excise Intelligence, etc., to exercise powers in relation to non-levy, short-levy or erroneous refund for a period prior to April 8, 2011 if, in fact, there was no proper assigning of the functions of reassessment or assessment in favour of such officers who issued such show-cause notices s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tatute. It was thus clearly not impacted by Explanation 2 and which in any case, as the Supreme Court explains in Canon II, was intended to subserve an independent objective. We deem it apposite to extract the following paragraphs from Canon II to buttress our conclusions: "138. As stated in the foregoing extract, sub-section (11) was introduced in the statute to remedy the defects highlighted by this Court in the case of Sayed Ali (supra) and the same retrospectively empowered all officers of customs appointed under Section 4 (1) before 06.07.2011 to conduct assessments under Section 17 of the Act and to be proper officers for the purpose of Section 28. 139. The Statement of Objects and Reasons of the Validation Act explained that the introduction of Section 28 (11) was necessary because the position of law on the functions of proper officers as interpreted by this Court in Sayed Ali (supra) and the consequent invalidation of show cause notices issued by the Commissionerates of Customs (Preventive), DRI and others, was not the legislative intent. Parliament clarified that show cause notices issued by officers of the Commissionerates of Customs (Preventive), DRI, Directorate Ge ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ause notice to the exclusion of all other officers who may have power in relation to that subject matter. We find this to be a reasonable construal of the import and application of Section 28 (11). xxxx xxxx xxxx 154. Thus, we are of the considered view that the enactment of sub-section (11) of Section 28 cures the defect pointed out in Sayed Ali (supra) and the judgment in Mangali Impex (supra) deserves to be set aside. 155. It follows from the above discussion that sub-section (11) of Section 28 is constitutionally valid, and its application is not limited to the period between 08. 04.2011 and 16.09.2011. 156. For the reasons in the foregoing paragraphs, we hold that the Bombay High Court judgment in Sunil Gupta (supra) lays down the correct position of law, whereas the Delhi High Court decision in Mangali Impex (supra) is incorrect and is consequently set aside." 69. For the sake of completeness, it would be pertinent to take note of the subsequent repeal of the Validation and Amendment Act in terms of the Repealing and Amending Act, 2019 [2019 Act]. However, the same would be of little consequence in light of Section 4 thereof and which is extracted hereinbelow: "4. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m 29 March 2018, the date when the 2018 Act had come to be promulgated: "Explanation 4.-For the removal of doubts, it is hereby declared that notwithstanding anything to the contrary contained in any judgment, decree or order of the Appellate Tribunal or any Court or in any other provision of this Act or the rules or regulations made thereunder, or in any other law for the time being in force, in cases where notice has been issued for non-levy, short-levy, non-payment, short payment or erroneous refund, prior to the 29th day of March, 2018, being the date of commencement of the Finance Act, 2018 (13 of 2018), such notice shall continue to be governed by the provisions of Section 28 as it stood immediately before such date." Thus, all proceedings emanating from SCNs issued prior to 29 March 2018 were ordained to be governed by Section 28 as it stood immediately before that date. The clear intent of Explanation 4 was to insulate proceedings that were pending on the date when the 2018 Act came to be promulgated and thus be freed from the impact of cessation and interdiction of proceedings in light of the two Provisos which had come to be inserted in Section 28 (9). 72. It would be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (hereinafter referred to as the Customs Act),- (i) anything done or any duty performed or any action taken or purported to have been taken or done under Chapters V, VAA, VI, IX, X, XI, XII, XIIA, XIII, XIV, XVI and XVII of the Customs Act, as it stood prior to its amendment by this Act, shall be deemed to have been validly done or performed or taken; (ii) any notification issued under the Customs Act for appointing or assigning functions to any officer shall be deemed to have been validly issued for all purposes, including for the purposes of Section 6; (iii) for the purposes of this section, Sections 2, 3 and 5 of the Customs Act, as amended by this Act, shall have and shall always be deemed to have effect for all purposes as if the provisions of the Customs Act, as amended by this Act, had been in force at all material times. Explanation.-For the purposes of this section, it is hereby clarified that any proceeding arising out of any action taken under this section and pending on the date of commencement of this Act shall be disposed of in accordance with the provisions of the Customs Act, as amended by this Act." Despite these legislative interventions, the respondents c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for a period longer than the period specified under the said Rules. 26. Undisputedly, no such order has been placed on record which required the respondents-Banks to preserve records concerning the transactions in question for a period longer than eight years. 27. It could thus be seen that even under the said Rules, the Banks are required to preserve the record for five years and eight years respectively. On this ground also, permitting the show cause notices and the proceedings continued thereunder of the transactions which have taken place much prior to eight years would be unfair and unreasonable." 76. Way back in 1969, the Supreme Court in State of Gujarat vs. Patil Raghav Natha (1969) 2 SCC 187, had held that while Section 211 of the Land Revenue Code did not prescribe a limitation period for the Commissioner to revise orders, such power must be exercised within a reasonable time, determined by the facts of a case and the nature of the order. In this case, the Commissioner's action, over a year later, was deemed unreasonably delayed with the Supreme Court observing thus: "11. The question arises whether the Commissioner can revise an order made under Section 65 at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rule unreasonable or violative of Article 14 of the Constitution. In the absence of any period of limitation it is settled that 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 assesee 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 of 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." 78. More recently in SEBI vs. Sunil Krishna Khaitan (2023) 2 SCC 643, the Supreme Court again reiterated the principle that when no limitation period is prescribed for initiating proceedings under a statute, action must still be taken within a reasonable period and which could vary based on the facts and circumstances of each case. The key factors to be considered, the Supreme Court explained, would include the nature of the violati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e absence of any period of time and limitation prescribed by the enactment, every authority is to exercise power within a reasonable period. What would be the reasonable period would depend upon facts of each case, such as whether the violation was hidden and camouflaged and thereby the Board or the authorities did not have any knowledge. Though, no hard and fast rules can be laid down in this regard as determination of the question will depend on the facts of each case, the nature of the statute, the rights and liabilities thereunder and other consequences, including prejudice caused and whether third party rights have been created are relevant factors. Whenever a question with regard to inordinate delay in issuance of a show-cause notice is made, it is open to the noticee to contend that the show-cause notice is bad on the ground of delay and it is the duty of the authority/officer to consider the question objectively, fairly and in a rational manner. There is public interest involved in not taking up and spending time on stale matters and, therefore, exercise of power, even when no time is specified, should be done within reasonable time. [ See State of Gujarat v. Patil Raghav N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f whether the respondents were obligated to inform the petitioner that the SCN was being placed in the "call book" as per the Board's circulars. The Court noted that while placing matters in the "call book" was permissible, that action would have to be preceded by the assessee being placed on due notice. In that decision, it was observed as hereunder: "34. It is also relevant to note that the petitioner was provided no information that the impugned show-cause notice has been placed in the, "call book". Even if it is accepted that it is permissible for the respondents to place the matter in the "call book" which this Court does not-it was necessary for the respondents to have communicated the said fact to the petitioner. There are a series of decisions rendered by the Bombay High Court restraining the respondents from continuing with the proceedings in cases where the matters were placed in the "call book" without any information to the assessee. It is apposite to refer to a few of those decisions. xxxx xxxx xxxx 36. In ATA Freight Line (I) (P) Ltd. v. Union of India [ATA Freight Line (I) (P) Ltd. v. Union of India, (2023) 25 GSTR-OL 181 : 2022 SCC OnLine Bom 648], the Bombay ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from respondent No. 2 indicates that the only information provided to the petitioner was that files were transferred to call book as per the circulars issued by the Central Board of Excise and Customs which has been revised from time to time. A copy of the Circular dated April 26, 2016 was enclosed by respondent No. 2 along with the said letter for reference of the petitioner. 22. A perusal of the said Circular dated April 26, 2016 relied upon by respondent No. 2 indicates that by the said circular, respondent No. 1 clarified that the cases where (i) the issue involved has either been decided by the Supreme Court or the High Court and such order has attained finality or, (ii) Board has issued new instruction or circular clarifying the issue involved, subsequent to issue of the order to transfer the case to the call book would be taken out of call book and adjudicated. The said circular also provides for various eventualities where file can be transferred to call book already referred to in the earlier paragraph of this judgment. 23. Neither the affidavit-in-reply nor the arguments advanced by the learned counsel for the respondents indicated that the petitioner was at any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rth Block, New Delhi, dated: 18 November, 2021 INSTRUCTIONS To 1. All Principal Chief/ Chief Commissioners of CGST, Central Excise and Service Tax; 2. All Principal Commissioners/ Commissioners of CGST, Central Excise and Service Tax; 3. The Director General of DGGI; Madam/ Sir, Subject: Audit para no. 5.1 to 5.18 of chapter V of Audit report no. 01 of 2021 on SCNs and adjudication process in CBIC - regarding. Audit para no. 5.1 to 5.18 of chapter V of Audit report no. 01 of 2021 on Show Cause Notices and adjudication process in CBIC has made certain observations regarding issuance of SCNs and disposal of adjudication matters including call book cases. 2. Briefly, the Audit has pointed that (i) Draft SCNs have been found pending for issuance. (ii) There is inordinate delay in adjudication. (iii) Adjudication orders have not been issued within stipulated period after completion of personal hearings. (iv) Periodical review of call book cases has not been done. (v) In certain cases, the records/files pertaining to adjudication have not been produced before Audit Party. 3. With the introduction of GST law, Board has consistently expressed its desire and res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ayed retrieval of SCNs from Call Book, incorrect transfer of SCNs to Call Book, resulting in irregular retention of cases in Call Book. 4.4.1 Kind attention is invited to Board's D.O letter F. No. 101/2/92-CX.3 dated 04.03.1992 wherein while indicating the categories of the cases to be transferred to call book, it was directed that a case should be transferred to call book only with the approval of Commissioner. Further, the Commissioners were instructed to review the Call book cases on monthly basis. These instructions have subsequently been reiterated vide Circular No. 385/18/98-CX, dated 30-3-1998 and Circular No. 719/35/2003-CX dated 28.05.2003. Audit has pointed out certain instances where Call book cases are not reviewed periodically, due to which, there are instances of delay in retrieval of Call book cases. It is therefore, reiterated that instructions in above mentioned D.O letter and subsequent instructions/circulars must be adhered to and Pr. Commissioners/Commissioners must review Call book cases on monthly basis. Non-adherence to these instructions shall be viewed seriously. 4.4.2 Audit has also pointed certain instances where noticees are not intimated about trans ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 88 issued from F.No. 240/15/88-CX.7 wherein it has been communicated that the files leading to passing of adjudication/appellate orders need not be made available to the audit parties of the Accountant General. It may be seen that the above-mentioned Circular was issued keeping in view the basic premise that audit parties cannot question the decision taken by the judicial or quasi-judicial authority. The said circular thus needs to be read in proper context that sharing of records with audit parties does not interfere with the judicial/quasi-judicial proceedings. The audit parties may require the production of the records for ensuring that due procedure is followed or otherwise. Therefore, the request of the Audit for production of records must be acceded to. 4.6 Attention is invited to the instructions issued by the Board vide Circular No. 716/32/2003-CX., dated 23-5 2003 wherein the Commissioners and Chief Commissioners have been directed to analyze the reasons for pendency of adjudication cases and strengthen the monitoring system. These instructions have also been reiterated from time to time. In this regard MPR DPM-ST-1A and DPM-CE-1A of the Monthly Progress Report (MPR) inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Board to keep the SCN in a call book. It is further submitted that as per the CBIC circulars, the case can be referred to call book only after prior approval of Jurisdictional Commissioner. In the entire counter affidavit the respondents have not annexed or brought on record any document to show that necessary approval was taken from the Jurisdictional Commissioner. It is further pointed out from the CBIC circulars issued from time to time such as Circular Nos. 385/18/98-CX dated 30th March 1998, 719/35/2003-CX dated 28th May 2003 and 1053/2/2017-CX dated 10th March 2017 that the competent authorities have been mandated to carry out periodic monthly review of SCNs kept in a call book. The respondents have not given a semblance of an answer as to whether any such periodical review was carried out by the competent authority. Referring to the Circular dated 10th March 2017, Clause 9.4 it is also submitted that whenever a case has been transferred to the call book a formal communication should be issued to the noticee. It is submitted that various courts have disapproved of such an approach to revive an adjudication proceedings after an inordinate delay in view of the conditions s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xxxx xxxx xxxx 16. Falling back upon the CBIC circular, it is contended that the competent authority i.e. the Commissioner, Central Excise has revived the proceedings and issued a notice of personal hearing to the petitioner since these SCNs/SODs were kept in call book on account of the matter pending before different courts including the Apex Court. However, on being specifically asked learned counsel for the respondent has not been able to dispute or indicate any explanation from the stand of the respondents as reflected in the counter affidavit as to whether there was any basis for keeping the SCN in call book after the decision rendered by the Apex Court on 5th May 2004 in Civil Appeal No. 3973 of 2001. There are no materials enclosed to the counter affidavit which also goes to show that the prior approval of the jurisdictional commissioner was taken before keeping the SCN into the call book. It is also not shown from the counter affidavit whether the petitioner was ever communicated of such a decision to keep the case in the call book all along and even after disposal of the Civil Appeal No. 3973 of 2001 vide judgment dated 5th May 2004. However, learned counsel for the res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted by the respondents at Clause 3 and 4 quoted above also stand satisfied in the present case. The respondents have not enclosed any document to show that prior approval of the Collector of excise was taken before keeping the case in the call book. There seems to be no reference of any periodic review of the call book, though the relevant CBIC circulars such as the circular dated 30th March 1998 and 20th May 2003 specifically required the Commissioners to review the cases transferred to call books on a monthly basis in circumstances where the department was confronted with a situation where provisional assessment cases were kept pending for several years. The extract of the relevant circulars are quoted here under:- In circular dated 30th March 1998 : "While the Board had issued instructions to Commissioners to review the cases transferred to call books on a monthly basis, it is observed that no such review is actually being done. (Board's DO Letter F.No.101/2/92-CX.3, dated 4th March 1992 and Board's Circular No.53/90-CX.3, dated 6.9.1990). 2. The Board vide its < > specified the following categories of cases which can be transferred to call book viz.: 1. Cases in which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ations. In fact, and to the contrary, the frequent placement of matters in the call book, the retrieval of matters therefrom and transfer all over again not only defies logic it is also demonstrative of due application of mind quite apart from the said procedure having been found by us to be contrary to the procedure contemplated by Section 28. The respondents have, in this regard, failed to abide by the directives of the Board itself which had contemplated affected parties being placed on notice, a periodic review being undertaken and the proceedings having been lingered 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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