The Delhi Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that flexibility 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 .
The bench of Justice Dilip Gupta (President) and P.V. Subba Rao (Technical Member) has observed that 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.
The bench noted that no sincere efforts have been made by the Department for adjudicating the SCN. 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.
The show cause notice in this appeal was issued on 28.04.2015 by the Principal Additional Director General. It was adjudicated on 14.06.2022 by the Adjudicating Authority.
As the notice was issued on 28.04.2015, it would be governed by the provisions of sub-section (11) of section 11A, as it stood during the period from 28.04.2015 to 13.05.2015. Sub-section (11) of section 11A, as it stood during this period, provided that the Central Excise Officer shall determine the amount of duty within six months from the date of notice, where it was possible to do so, in respect of cases falling under sub-section (1).
However, in respect of cases falling under sub-section (4) or sub-section (5), the Central Excise Officer shall determine the amount of duty within one year from the date of notice, where it is possible to do so.
The show cause notice in this appeal was issued under sub-section (4) of section 11A. Thus, the Central Excise Officer had to determine the amount of duty within one year from the date of notice, where it was possible to do so.
It was incumbent upon the Adjudicating Authority to determine the amount of duty within one year from 28.04.2015, where it was possible to do so. The discussion and findings in the impugned order start from paragraph 117 but no reason has been given in the impugned order by the Adjudicating Authority for not being able to determine the duty within the stipulated period of one year from the date of issuance of the show cause notice.
The department contended that the adjudication was completed within nine months from the completion of the last hearing on 24.09.2021. Prior to this hearing, it was incumbent upon the Adjudicating Authority to “scrupulously adhere to the principles of natural justice by giving ample opportunities to the noticees to make their written submissions, allow cross-examination and opportunities for personal hearing” as contemplated in section 33A of the Central Excise Act.
The appellant contended that the department has not been able to substantiate that the Adjudicating Authority was prevented by “such circumstances or insurmountable exigencies” from concluding the adjudication proceedings within the stipulated period contemplated under sub-section (11) of section 11A.
The CESTAT concluded that the order would have to be set aside only for the reason that the adjudication was not completed within the time limit prescribed under sub-section (11) of section 11A of the Central Excise Act.
Case Details
Case Title: M/s Kopertek Metals Pvt. Ltd. Versus Commissioner of CGST (West)
Case No.: Excise Appeal No. 52178 Of 2022
Date: 25.11.2024
Counsel For Appellant: Ashish Bhatt
Counsel For Respondent: Rakesh Agarwal
