1. Pursuant to the common order dated 18.03.2020, passed by this Court in Special Civil Application No.6781 of 2020 and Special Civil Application No.6782 of 2020, a detailed representation was sent to the respondent-Department on 20.05.2020 by the Proprietor, applicant – original petitioner, making a grievance that the directions of the Court has not been complied with.

2. It is the grievance on the part of the applicant that when specific details were sought for about the pending matter under the Right to Information Act by application dated 15.06.2020, it was realized that pendency of Departmental Appeal was the reason for not proceeding with the matter and for not complying with the directions issued by this Court. The applicant, therefore, is before this Court seeking revival of the original matters.

3. This Court on 29.01.2021, by issuing notice, passed the following order:

“1. The applicant­original petitioner is the proprietor of M/s.Lazio Exports, Surat, and on one of the co­notice in the show­cause notice dated 31.03.2005, which was given on the basis of the intelligence collected by the officers of the Directorate of the Revenue Intelligence, Surat.

1.1 The applicant has approached this Court with the grievance that there is no adjudication taking place, although, eight years have passed since the order passed by the CESTAT and instead, show­cause notice came to be issued for readjudication, relying on the decision ‘SIDDHI VINAYAK SYNTEX PVT. LTD. VS. UNION OF INDIA AND OTHERS’ in Special Civil Application No.19437 of 2016 and the allied matters.

2. We have heard the learned Advocate, Mr. Dave, who has urged that none of the communications has been replied to till date nor has other side attempted to adjudicate the matter, as has been directed. According to him, this is contrary to what has been directed by this Court.

3. NOTICE, returnable on 12TH FEBRUARY, 2021. Over and above the normal mode of service, direct service through EMAIL or SPEED POST is permitted. ”

4. The learned Central Government Standing Counsel, Mr.Dhaval Vyas appeared for the respondent no.2 and Mr.Parth Divyeshwar, learned Central Government Standing Counsel, for respondent no.1. The instructions received from the Department are shared by the learned Central Government Standing Counsel, Mr. Dhaval Vyas. In absence of any time frame given by this Court to decide the matter while disposing of both the matters, the Department has chosen not to comply with the same since the Department has challenged the decision rendered in case of M/s. SIDDHI VINAYAK SYNTEX PVT. LTD. VS. UNION OF INDIA AND OTHERS, passed in Special Civil Application No.19437 of 2016 and allied matters., by preferring Special Leave Petition No.18214 of 2017 before the Supreme Court and therefore, the determination of duty in terms of Section 28(9A) (a) of the Customs Act, 1962 is kept pending.

5. From the time this Court had disposed of the matters, there was no communication on the part of the respondents until the applicant chose to communicate on dated 10.06.2020. The only aspect which has been referred to is about the pendency of Departmental Appeal and the transfer of the matter to the call­book by Principal Commissioner of Customs.

6. The Court was aware of the pendency of Special Leave petition No.18214 of 2017 before the Apex Court, as has been referred to in the case of M/s. Parimal Textiles vs. Union of India, 2018(8) G.S.T.L.361(Guj.). This very issue was contended by the Department and the Court had negated the same in Special Civil Application No.16615 of 2020 vide order dated 12.02.2021, by holding thus:

“14.1 In the case of Siddhi Vinayak Syntex Pvt.Ltd. (supra), this Court extensively examined the maintainability of writ petition in wake of the existence of alternative remedy, where there was a delay of adjudication of show cause notice after 17 years. The department’s contention was that the show cause notice remained undecided as it had been consigned to call book in view of CBEC Circular 162/73/95­CX dated 14.12.1995 to await outcome of a similar case. The Court held that consistent approach adopted by different High Courts is that the revival of the proceedings after long time gap without any proper explanation is unlawful and arbitrary. The Court also held that the said circular cannot be said to have issued in exercise of powers under section 37B of the Central Excise Act as concept of call book did not relate to uniformity in classification of excisable goods, or to levy of excise duties on such goods. Instructions to consign a case to call book relatable to adjudicatory process, and do not provide for matters, any incidental consistent with or the supplemental Act or Rules thereunder. The Court held that the CBEC is not empowered to issue instructions to any adjudicatory authority in relation to matters pending for adjudication before it. Consignment of matter to call book were extraneous to proceedings on grounds and not due to impossibility of authority to decide the case and hence the Court held that transferring the matter to call book is contrary to the provisions of law and explanation put forth by Department for delay is not plausible explanation for not adjudicating upon show cause notice within reasonable time. It is, therefore, held that the revival of the proceedings after long gap without discussing any reason for delay is unlawful and arbitrary. Assessee was not informed about consigning matter to call book. Therefore, he would have reasonable and bone fide belief that the proceedings has been dropped as in other cases and his position also would change considerably in the interregnum period. Hence, such transfer to the call book of the matter and revival of the same would cause immense prejudice to the assessee.”

“15. The moot question that arises for consideration in the present case is, whether it was permissible for the respondents to act upon a show cause notice issued in the year 1998, after a period of seventeen years. At this juncture, it may be germane to refer to the decisions on which reliance has been placed by the learned counsel for the petitioner.

16. The decision of the Bombay High Court in the case of Shirish Harshavadan Shah v. Deputy Director, Enforcement Directorate, Mumbai (supra), was relied upon wherein in the facts of the said case for a period of almost twelve years, no steps had been taken by the respondents therein to proceed with the adjudication proceedings. The court held that no fault could be attributed to the petitioners for this delay and inaction on the part of the respondents; the respondents had not alleged any malice on the part of the petitioners nor was it the case of the respondents that the petitioners therein were responsible for the delay in the proceedings. The court found no justification in the explanation tendered for causing delay in the adjudication proceedings and held that the department was not entitled to re-open old matters in this manner and if the department’s contention as to limitation were to be accepted, it would mean that the department can commence adjudication proceedings twenty years, twenty-five years or thirty years after the original show cause notice, which cannot be permitted.

17. In Hindustan Lever Limited v. Union of India (supra), the Bombay High Court held that the extent of delay which had occurred in adjudication upon the issues was also relevant. The court observed that it was well-settled that the adjudication proceedings have to be culminated within a reasonable time and if it is not done so, they stand vitiated on the said ground. The court observed that, normally for compliance of the principles of natural justice it would have remanded the matter back to the concerned authority. However, considering the time lag that has elapsed from the date of first hearing granted to the petitioner, since there had been undue delay in deciding the said proceedings, it did not deem it fit to remand the matter to the concerned authority of the respondents. The court, accordingly, set aside the impugned order.

18. In R. M. Mehrotra v. Enforcement Directorate (supra), the Delhi High Court held that the revival of the proceedings after a time gap of ten years, without notice of hearing disclosing any reason for the delay, is not a mere matter of impropriety; the respondents were under a duty to disclose what compulsions held up the adjudicatory process for so long. In the absence of such explanation, revival of the proceedings would be unlawful and arbitrary.

19. Thus, the consistent approach adopted by the different High Courts insofar as the delay in concluding proceedings pursuant to a show cause notice is concerned, is that revival of proceedings after a long time gap without any proper explanation therefor, is unlawful and arbitrary.

20. The question that, therefore, arises for consideration is as to whether the explanation put forth by the respondents for the delay in determining the duty pursuant to the show cause notice issued in 1998 can be said to be reasonable. As noticed hereinabove, it is the case of the respondents that the show cause notice has remained undecided in view of the fact that it had been consigned to the call book in view of the Circular No.162/73/95-CX dated 14.12.1995 issued by the CBEC. Insofar as the power of the CBEC to issue instructions to the authorities under the Central Excise Act are concerned, the same are relatable to the provisions of section 37B of the Act, which read thus:-

“37-B. Instructions to Central Excise Officers-The Central Board of Excise and Customs constituted under the Central Boards of Revenue Act, 1963 (54 of 1963), may, if it considers it necessary or expedient so to do for the purpose of uniformity in the classification of excisable goods or with respect to levy of duties of excise on such goods or for the implementation of any other provision of this Act, issue such orders, instructions and directions to the Central Excise Officers as it may deem fit, and such officers and all other persons employed in the execution of this Act shall observe and follow such orders, instructions and directions of the said Board: Provided that no such orders, instructions or directions shall be issued-

(a) so as to require any Central Excise Officer to make a particular assessment or to dispose of a particular case in a particular manner: or

(b) so as to interfere with the discretion of the Commissioner of Central Excise (Appeals) in the exercise of his appellate functions.

21. Thus, under section 37B of the Act, the Central Board of Excise and Customs is empowered to issue instructions to Central Excise Officers if it considers it necessary or expedient to do so firstly, for the purpose of uniformity in the classification of excisable goods; secondly with respect to levy of duties of excise on such goods; and thirdly, for the implementation of any other provision of the Act. Insofar as the concept of call book is concerned, the same evidently does not relate to uniformity in the classification of excisable goods, or to levy of duties of excise of such goods. Insofar as the implementation of any other provision of this Act is concerned, the concept of call book, cannot be traced to any other provision of the Act nor does it appear to be relatable to the implementation of any other provision of the Act. Evidently, therefore, the circular dated 14.12.1995, cannot be said to have been issued in exercise of powers under section 37B of the Act.

22. On behalf of the respondents, reliance has also been placed upon rule 31 of the Central Excise Rules, which makes provision for power to issue supplementary instructions and lays down that the Board or the Principal Chief Commissioner or Chief Commissioner, as the case may be, or the Principal Commissioner or Commissioner, as the case may be, may issue written instructions providing for any incidental or supplemental matters, consistent with the provisions of the Act and the rules. In view of the provisions of rule 31 of the rules, any instructions issued by the Board thereunder have to be either incidental or supplemental and consistent with the provisions of the Act and the rules. In the opinion of this court, instructions to consign a case to the call book are relatable to the adjudicatory process, and do not provide for any incidental or supplemental matters, consistent with the Act or the rules. Neither the Act nor the rules, in any manner empower the CBEC to issue instructions to any adjudicatory authority in relation to matters pending for adjudication before it.

23. Insofar as the show cause notice in the instant case is concerned, the same has been issued under section 11A of the Act. Proceedings under section 11A of the Act are adjudicatory proceedings and the authority which decides the same is a quasi-judicial authority. Such proceedings are strictly governed by the statutory provisions. Section 11A of the Act as it stood at the relevant time when the show cause notice came to be issued, provided for issuance of notice within six months from the relevant date in ordinary cases and within five years in case where the extended period of limitation is invoked. Section 11A thereafter has been amended from time to time and in the year 2011, various amendments came to be made in the section including insertion of sub- section (11) which provides that the Central Excise Officer shall determine the amount of duty of excise under sub- section (10) – (a) within six months from the date of notice where it is possible to do so, in respect of cases falling under subsection (1); (b) within one year from the date of notice, where it is possible to do so, in respect of cases falling under subsection (4) or sub-section (5).

24. Thus, with effect from the year 2011 a time limit has been prescribed for determining the amount of duty of excise where it is possible. It cannot be gainsaid that when the legislature prescribes a time limit, it is incumbent upon the authority to abide by the same. While it is true that the legislature has provided for such abiding by the time limit where it is possible to do so, sub-section (11) of section 11A of the Act gives an indication as to the legislative intent, namely that as far as may be possible the amount of duty should be determined within the above time frame, viz. Six months from the date of the notice in respect of cases falling under subsection (1) and one year from the date of the notice in respect of cases falling under subsection (4) or sub-section (5) . When the legislature has used the expression “where it is possible to do so”, it means that if in the ordinary course it is possible to determine the amount of duty within the specified time frame, it should be so done. The legislature has wisely not prescribed a time limit and has specified such time limit where it is possible to do so, for the reason that the adjudicating authority for several reasons may not be in a position to decide the matter within the specified time frame, namely, a large number of witnesses may have to be examined, the record of the case may be very bulky, huge workload, non- availability of an officer, etc. which are genuine reasons for not being able to determine the amount of duty within the stipulated time frame. However, when a matter is consigned to the call book and kept in cold storage for years together, it is not on account of it not being possible for the authority to decide the case, but on grounds which are extraneous to the proceedings. In the opinion of this court, when the legislature in its wisdom has prescribed a particular time limit, the CBEC has no power or authority to extend such time limit for years on end merely to await a decision in another case. The adjudicatory authority is required to decide each case as it comes, unless restrained by an order of a higher forum. This court is of the view that the concept of call book created by the CBEC, which provides for transferring pending cases to the call book, is contrary to the statutory mandate, namely, that the adjudicating authority is required to determine the duty within the time frame specified by the legislature as far as possible. Moreover, as discussed hereinabove, there is no power vested in the CBEC to issue such instructions under any statutory provision, inasmuch as, neither section 37B of the Central Excise Act nor rule 31 of the rules, envisage issuance of such directions. The concept of call book is, therefore, contrary to the provisions of the Central Excise Act and such instructions are beyond the scope of the authority of the CBEC. Transferring matters to the call book being contrary to the provisions of law, the explanation put forth by the respondents for the delay in concluding the proceedings pursuant to the show cause notice 3.8.1998 cannot be said to be a plausible explanation for not adjudicating upon the show cause notice within a reasonable time. In view of the settled legal position, as propounded by various High Courts, with which this court is in full agreement, the revival of proceedings after a long gap of ten to fifteen years without disclosing any reason for the delay, would be unlawful and arbitrary and would vitiate the entire proceedings.

25. Examining the matter from another angle, it is the stand of the respondents that the matter was kept in the call book for all these years to await the outcome of a similar case in the case of M/s. Siddharth Petro Products Limited and others, which was pending before the Appellate Tribunal. In such a situation, the decision in the case of the petitioner should be governed by the decision of the Appellate Tribunal. However, the respondents after keeping the matter in the call book for fifteen years, have thereafter chosen not to follow the outcome of the other matter wherein the show cause notice had been dropped by the adjudicating authority, and the Appellate Tribunal had dismissed the appeal, albeit on grounds other than on merits.

26. Moreover, as is evident from the facts noted hereinabove, the respondents while consigning the matter to the call book did not deem it fit to inform the petitioner about it. Since in other cases, such proceedings had been dropped, the petitioner had reason to form a bona fide belief that the proceedings in its case had also been dropped. During the interregnum the petitioner’s position has changed considerably. Ln view of the fact that the factory of the petitioner company has been closed down and sold, it cannot be gainsaid that even if the petitioner was served with the notice of personal hearing, it would be difficult for it to defend the case inasmuch as in view of the lapse of time and intervening circumstances, the evidence might have been lost. After seventeen years, the persons who were conversant with the case may not be available, documentary evidence may have been displaced. Thus, the delay in deciding the proceedings, that too without bringing it to the notice of the petitioner that the case was transferred to the call book and was therefore pending, causes immense prejudice to the petitioner. The revival of the proceedings, therefore, is in complete breach of the principles of natural justice and hence, the impugned show cause notice and the order-in- original judgement passed pursuant thereto, cannot be sustained.”

7. This direction was also carried to the Apex Court by filing Special Leave Petition No.18214 of 2017 and the Apex Court has not entertained the same.

8. As this Court has kept open all the legal issues, the learned Central Government Standing Counsel, Mr. Vyas, on taking instructions, submitted that the matter shall be decided within a period of 8 weeks, bearing in mind the decisions rendered in case of M/s. SIDDHI VINAYAK SYNTES PVT. LTD. VS. UNION OF INDIA AND OTHERS and M/s. Parimal Textiles vs. Union of India. Let the same be decided by the competent authority without raising any technical issue of jurisdiction.

9. Both the applications are disposed of. All the questions including the applicability of the ratio pressed into service by the applicant, are kept open by the Court.