The Delhi Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) while quashing the order issued after inordinate delay held that the excise department waited 9 years just to fix personal hearing, is unreasonable.
The bench of Justice Dilip Gupta (President) and P.V. Subba Rao (Technical Member) has observed that the Statute of Limitation, being a procedural law, would apply to pending cases as well with the rider that if something had already expired under the previous law, the new limitation would not revive it. So long as the issue is alive, the new limitation would apply. The date of cause of action is irrelevant to the limitation.
The bench noted that even if the limitation is counted reckoning the date of amendment of section 11A on 8.4.2011, the date of the impugned order 22.2.2019 is clearly time barred and there is no explanation in the order for the inordinate delay. If it is considered that there was no limitation at all, even then the delay of almost ten years is passing the order with no reasons whatsoever recorded for the delay cannot be sustained.
The appellant/assessee has challenged the Order passed by Commissioner by which he decided the proposals made in the Show Cause Notice and confirmed demand under section 11A (1) of the Central Excise Act, 1944 but dropped demand.
He also ordered payment of interest on the confirmed demand under section 11AB of the Act and imposed a penalty of Rs. 80,46,816/- under section 11AC of the Act on M/s. Sharma Steel Rolling Mills and penalty of Rs. 80,46,816/- under Rule 26 of the Central Excise Rules, 2002 on Shri Shravan Kumar.
There is no appeal from the department on the portion of the demand dropped by the Commissioner in the order.
The appellant contended that the allegation of clandestine removal cannot be proved on the basis of assumptions and presumptions. The demand in the SCN was time barred and the impugned order needs to be set aside on this ground alone. There was also an inordinate delay in deciding this SCN. It was issued on 3 December 2009 but was decided on 22 February 2019 after almost 10 years. The impugned order needs to be set aside even on this ground.
The tribunal held that the appellants had been prompt and vigilant in replying to the SCN and no reason whatsoever is given in the order for not adjudicating the matter immediately and to have waited for over nine years just to fix the personal hearing. The order cannot, therefore, be sustained and needs to be set aside.
Case Details
Case Title: M/S Sharma Steel Rolling Mills Versus Commissioner Of CGST & Central Excise-Jaipur
Case No.: Excise Appeal No. 51679 Of 2019
Date: 07/03/2025
Counsel For Appellant: Jatin Mahajan
Counsel For Respondent: V.K. Jain
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