Proceedings from SCN till finality against Assessee not culminating in reasonable time stands vitiated: CESTAT sets aside 14 years long proceeding [Read Order]

The Customs, Excise, and Service Tax Appellate Tribunal (CESTAT), Kolkata sets aside 14 yearlong proceedings against the assessee and held that Proceedings from SCN till finality against the assessee not culminating in reasonable time should stand vitiated.

The instant appeal challenges the order-in-original dated 29th June, 2018, whereby the respondent has confirmed the demand of Customs Duty of Rs.52,98,495/- with interest thereon under Section 28(8) and 28AB of the Customs Act, 1962 upon the appellant. The respondent has also imposed a penalty of the self-same amount by virtue of the impugned order under Section 114A of the said Act on the appellant, M/s. Namdev Exports.

The grounds of appeal and the submissions advanced on behalf of the Appellant by Hasmukh Kundalia and Arnab Chakraborty, may be read together to get an understanding of the Appellant’s case.  The Counsels submitted that the impugned order was passed after conducting five personal hearings on 01st June, 2005, 17th October, 2006, 03rd December, 2014, 11th October, 2017, and 9th May, 2018. There was a delay of 14 years in the passing of the impugned order and the completion of proceedings. The Appellant has not contributed to the delay and sent a letter dated 05th May, 2015 requesting expeditious disposal. This violates natural justice and vitiates the order.

The Bench consisting of  P K Choudhary, Judicial Member, and Raju, Technical Member observed that “In regards the first issue, it is found that show-cause notice was issued on 09th November, 2004 and the reply was submitted on 21st March, 2005. Five personal hearings were conducted on 01st June, 2005, 17th October, 2006, 03rd December, 2014, 11th October, 2017, and 09th May, 2018. The impugned order was issued on 29th June, 2018.

The total proceeding as contended on behalf of the Appellant, indeed, took 14 long years to reach finality. The Appellant reminded the respondent on 05th May, 2015 that written arguments had been submitted, the Appellant had been heard, and that an order was awaited and requested. The respondent has acknowledged in paragraph 50 of the impugned order that there were multiple hearings, but there is no explanation for the delay of 14 years. “

The Tribunal further stated that “If proceedings do not culminate within a reasonable period of time, then they stand vitiated.”

To Read the full text of the Order CLICK HERE

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