The Orissa High Court chaired by the Chief Justice S. Muralidhar and Justice M.S. Raman quashed the Show Cause Notice (SCN) issued by the Customs Department after 16 years.
The bench quashed the SCN dated 11th March, 1999 issued by the Department to the Petitioner in relation to the alleged violations of Rules 9(1), 52A, 173B and 173C of the Central Excise Rules, 1944 read with Section 11A(1) of the Central Excise Act, 1944 (CE Act)
The court observed the admitted position is that the period for which the demand was sought to be raised by virtue of the above SCN was April, 1994 to April, 1995.
Further noted that for some reason, which is not clear, the case has been transferred to ‘Call Book’ on 28th April, 1999. Meanwhile, on 18th June 1999, the Petitioner replied to the SCN.
The Department was the target of the current petition brought by M/s. IDCOL Ferro Chrome & Alloys Ltd. since it had lain dormant for 16 years and had only recently decided to recover the matter from the Call Book. A notification was sent to the petitioner on May 26th, 2017 designating June 1st as the date of the personal hearing.
The division bench remarked that the Department had not provided a convincing justification for why the matter had been transferred to the Call Book and then abruptly retrieved from said Call Book 16 years later.
The court mentioned the case Maxcare Laboratories Ltd. v. Joint Commissioner, CGST, Central Excise & Custom 2021 (378) ELT 401 (Ori.) , in more or less identical circumstances, this Court quashed the SCN and the further notice fixing the date of hearing.
Moreover in the present case, the Court was unable to find any valid explanation offered by the Department in delaying in issuing the initial SCN under Section 11A of the CE Act, 4 years after the period of demand and then, more importantly, taking 16 years to retrieve the matter from the Call Book.
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