A two-judge bench of the Delhi High Court has held that the central excise department can continue the proceedings for adjudication of the impugned show cause notice, after the lapse of almost thirteen years.
Justice Vibhu Bakhru and Justice Amit Mahajan were hearing a petition filed by Mr. Nanu Ram Goyal claiming that such proceedings are barred by limitation as the central excise department had failed to conclude the proceedings within a reasonable period from the date of issuance of the impugned show cause notice.
The department, on the other hand, contended that the proceedings pursuant to the impugned show cause notice were kept in abeyance as the matter was placed in a ‘Call Book’ in terms of the Circulars issued by the Central Board of Excise & Customs from time to time.
The division bench observed that section 73 of the Act, as in force at the material time, did not stipulate any time period.
“However, by virtue of the Finance (No.2) Act, 2014, sub-section (4B) was introduced in Section 73 of the Act which stipulates that where it is possible to pass an order, the Central Excise Officer would determine the amount of service tax within a period of one year in respect of cases falling under the proviso to subsection (1) or the proviso to sub-section (4A), and within a period of six months from the date of notice in cases falling under Section 73(1) of the Act,” the bench observed.
“In the facts of the present case, it is not necessary for this Court to examine the validity 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,” the bench added.
Relying on several decisions, the bench held that “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.”
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