Inordinate 11-Year Delay in Adjudication Violates S. 11A(11) of Central Excise Act: Delhi HC Orders Release of Goods [Read Order]
The Delhi High Court quashes excise orders over 11-year adjudication delay, directs release of seized goods and Bank Guarantees
![Inordinate 11-Year Delay in Adjudication Violates S. 11A(11) of Central Excise Act: Delhi HC Orders Release of Goods [Read Order]](https://www.taxscan.in/wp-content/uploads/2025/04/Central-Excise-Act-Delhi-HC-taxscan.jpeg "Inordinate 11-Year Delay in Adjudication Violates S. 11A(11) of Central Excise Act: Delhi HC Orders Release of Goods [Read Order]")
In a recent ruling, the Delhi High Court quashed orders of confiscation and penalty issued under Rule 25 of the Central Excise Rules, 2002, due to an inordinate delay of over 11 years in completing adjudication proceedings. The court directed the Central GST authorities to release the seized goods and return the Bank Guarantees furnished by the petitioners. The case arose from a search...
In a recent ruling, the Delhi High Court quashed orders of confiscation and penalty issued under Rule 25 of the Central Excise Rules, 2002, due to an inordinate delay of over 11 years in completing adjudication proceedings. The court directed the Central GST authorities to release the seized goods and return the Bank Guarantees furnished by the petitioners.
The case arose from a search and seizure operation conducted on 29.04.2011 by the Anti-Evasion Wing of Central Excise at the premises of three petitioner firms, Paras Products, Sai Enterprises, and Jaina Polymers. The firms were engaged in the manufacture and clearance of footwear components.
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Following the seizure, a show cause notice was issued on 25.10.2011, calling upon the petitioners to explain why the goods should not be confiscated and why penalties should not be imposed. However, the adjudication of this notice culminated only in 2022 and 2023, when the Orders-in-Original (OIOs) were passed, more than a decade later.
The petitioners challenged the validity of these OIOs, arguing that the adjudication was grossly delayed. They relied on several judicial precedents, including Vos Technologies India (P) Ltd. v. Director General, which explained the duty of tax authorities to conclude proceedings within a reasonable timeframe.
In response, the GST department cited structural challenges following the implementation of the CGST Act in 2017, disruptions due to the COVID-19 pandemic, and alleged non-cooperation from the petitioners as reasons for the delay. They also relied on the Supreme Court's decision in Swati Menthol and Allied Chemicals to justify the extended timeline.
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Justice Harish Vaidyanathan Shankar held that the reasons cited by the department were inadequate and did not justify the eleven-year delay, especially for the period between 2011 and 2017, before GST and COVID-19.
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The court observed that the statutory phrase “where it is possible to do so” could not be construed as a license for indolence and that authorities are legally obliged to act with due expedition. The court further observed that the department could have proceeded ex parte if the petitioners had failed to cooperate.
Finding the prolonged inaction unjustifiable, the court quashed the impugned orders dated 30.12.2022 and 02.03.2023. The court directed the Central GST authorities to release the Bank Guarantees furnished at the time of seizure within six weeks. The writ petitions were accordingly allowed.
To Read the full text of the Order CLICK HERE
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