9911796707
TMI Blog2025 (5) TMI 160X X X X Extracts X X X X X X X X Extracts X X X X ..... 014, 20.04.2015, 10.05.2016 and 19.03.2018 issued to the Petitioner for the periods 2007-08 to 2011-12, 2012-13, 2013-14, 2014-15, and 2015-16 to June 2017. 2. The Petitioner seeks quashing of the OIA, OIO and the SCNs, primarily on the ground of inordinate and unexplained delay in their adjudication, contending, inter alia, that: (a). The impugned OIA, OIO and SCNs are liable to be quashed for being constitutionally untenable and against the Principles of Natural Justice. (b). The inordinate delay in adjudication deprived the Petitioner of a fair opportunity to defend its case. (c). Although the SCNs were issued between the years 2013 to 2018 and replies were filed at the relevant time, the final adjudication was kept pending for several years, ranging from seven to twelve years. (d). The Respondents have violated the mandate of Section 73 (4B) of the Finance Act, 1994 [Finance Act] which provides a specific timeframe for adjudication i.e., six months or one year from the issuance of the SCN. (e). In respect of the first four SCNs dated 17.04.2013, 07.05.2014, 20.04.2015 and 10.05.2016, a personal hearing was held on 27.12.2016. Despite that, no final order was passed a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 014 * Reply 12.06.2014. * Common Written Submission dated 30.12.2016 pursuant to hearing dated 27.12.2016. * Common Additional Submissions dated 26.03.2024. 2013-14 20.04.2015 * Reply 15.05.2015. * Common Written Submission dated 30.12.2016 pursuant to hearing dated 27.12.2016. * Common Additional Submissions dated 26.03.2024. 2014-15 10.05.2016 * Common Written Submission dated 30.12.2016 pursuant to hearing dated 27.12.2016. * Common Additional Submissions dated 26.03.2024. 2015-16 to 2017-18 (upto June 2017) 19.03.2018 * Reply dated 04.04.2018. * Common Additional Submissions dated 26.03.2024. 15.03.2024 10. Vide a common OIO dated 27.06.2024, the Additional Commissioner, CGST, Delhi (East), summarily dismissed the contentions of the Petitioner on the issue of delayed adjudication and confirmed the demands proposed in the SCNs. 11. Being aggrieved by OIO dated 27.06.2024, the Petitioner preferred five (5) appeals. On 31.01.2025, vide a common Order, the Additional Commissioner, CGST, Delhi (East) confirmed all demands imposed against the Petitioner. Hence the present Petition. ANALYSIS: 12. Irrefutably, the impugned SCNs were issued on 17.04.2013, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eckoning the limitation period. Besides, at the given point of time, there was no rigidity or inflexibility under any given provision of the Finance Act, 1994 stipulating any time limit for completion of adjudication proceedings. I have also carefully gone through the Section 73 (4B) of the Finance Act, 1994 which is reproduced as under: Section 73-Recovery of service tax not levied or paid or short-levied or short-paid or erroneously refunded (4B) The Central Excise Officer shall determine the amount of service tax due under sub-section (2)- within six months from the date of notice where it is possible to do so, in respect of cases falling under sub-section (1); 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 (4A)] I find that the above provisions include the phrase "where it is possible to do so", indicating that the tax department is not mandated to complete proceedings within a specified timeframe. On the contrary, this language allows flexibility in managing the adjudication process to the department thereby exhorting that 'wherever it is possib ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are to be decided, after taking into account their written submission and submissions tendered during personal hearing, by issuing an appealable Order. Needless to mention that the Demand cum show cause notices and subsequent order is a part of principle of natural justice. Thus, notice issued for personal hearing before passing on adjudication order is a part of principle of natural justice given to the appellants. The Hon'ble Supreme Court in the case of CCE, New Delhi Vs M/s Bhagsons Paint Industry (India), reported in 2003 (158) ELT 129 (SC) 2003-TIOL-21-SC-CX, has held that there is no statutory bar to adjudicate the matter even after lapse of nine years after the issue of show cause notice and the adjudication pertains only to the actual levy of the duty which is due to the department and not to any levy of interest and penalty. Further, the Hon'ble Supreme Court in Commissioner, GST and Central Excise Commissionerate II & Ors. vs. M/s. Swati Menthol and Allied Chemicals Lid. & Ant. in SLP(C) No. 20072 of 2021 dated 10 July, 2023, on a similar plea being raised by the assessee, the Hon'ble Supreme Court had permitted adjudication of the show cause notice. Thus, i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns 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 terms contemplated under Section 73 (9) of the CGST Act. By virtue of sub-section (10) thereof, the proper officer is bound to frame such an order within three years from the due date for furnishing of an annual return. A notice commencing proceedings referable to Section 73 must be issued at least three months prior to the time limit as specified in sub-section (10) coming to an end. It is relevant to observe that Section 73 (10) of the CGST Act uses the words ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th reasonable expedition. This principle would apply equally to cases falling either under the Customs Act, the 1994 Act or the CGST Act. 86. When we revert to the facts that obtain in this batch, we find that the respondents have clearly failed to establish the existence of an insurmountable constraint which operated and which could be acknowledged in law as impeding their power to conclude pending adjudications. 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 w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs beyond its control which prevented it from moving with reasonable expedition. The authority does not, in fact, assert as such in the present case. 19. The Petitioner has also rightly drawn our attention to the judgments of M/s Shree Baba Exports (supra) and National Building Construction Co. Ltd.(supra) which categorically held that the statutory time frame for adjudication must be adhered to and that delayed adjudication will be barred. 20. The contents of Para 7.1 of the impugned OIA, extracted hereinabove, seeking to explain the delay in adjudication, do not inspire the confidence of the Court. The reasoning offered therein does not satisfy the requirement of the existence of conditions that are insurmountable or such that render the adjudicatory process by the department impossible. 21. The situation is also exacerbated by the fact that, for the first four impugned SCNs, a personal hearing had been held as far back as on 27.12.2016, and subsequent thereto, a clarificatory written response was also submitted by the Petitioner on 30.12.2016. In spite of that, no final order was passed by the Respondent, and the adjudicatory process remained in limbo for a further 7.5 years. ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
