The Orissa High Court (HC) held that the transfer of cases to call book and reviving after a long gap without any reasonable explanation is not allowable.
M/s. Maxcare Laboratories Ltd challenged a show cause notice dated 29th March 2000 (Annexure-1) issued by the Commissioner, Central Excise and Customs, Bhubaneswar-I (Opposite Party No.2) as well as a further notice dated 28th December 2017 (Annexure-3) issued by the Superintendent (ADJN), CGST, Central Excise and Customs, Bhubaneswar (Opposite Party No.3) and a notice dated 9th January 2018 (Annexure-5) issued by the said officer.
The Petitioner is a company carrying on the business of manufacturing perfumed hair oil and red tooth powder having its plant at Mancheswar Industrial Estate, Bhubaneswar. It is stated that the plant has been closed for a long and the Petitioner has no business operating in the State of Odisha.
The first impugned show cause notice (SCN) was issued by the Commissioner, Central Excise and customs proposing a demand of excise duty in the sum of Rs.75,65,511/invoking the extended period of limitation in terms of the proviso to Section 11A(1) of the Central Excise Act, 1944 (‘CE Act’) and Rules 9 (2) of the Central Excise Rules, 1944 (‘CE Rules’).
The SCN alleged that the Petitioner had suppressed production of perfumed hair oil and red toothpowder and removed surreptitiously the said excisable goods without payment of central excise duty during the year 1994-95.
The Petitioner did not hear anything from the Opposite Parties and suddenly, more than 17 years later 28th December 2017 received a fresh SCN on the same issue concerning the earlier SCN dated 29th March 2000 and stating that a personal hearing was fixed on 9th January 2018.
Justice S. Muralidhar and Justice S.K. Panigrahi observed that neither clauses (i), (ii) nor (iii) stand attracted and observed that nothing is indicated in the initial SCN issued on 29th March 2000 to justify the Department invoking the proviso to Section 11-A (1) of the CE Act.
It was observed that the High Courts have quashed such proceedings in specific to the issue of transfer of cases to the ‘call book’ and then reviving it after a long gap, without any reasonable explanation, there are decisions of the case was sought to be revived 17 years after the initiation of SCNs.
The Court found no justification for the Opposite Parties to revive the adjudication proceedings against the Petitioner 18 years after the issuance of the SCN and quashed the impugned SCN and the notices.
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