Delayed adjudication of stale show cause notices is bad in law and violates procedural fairness and the principles of natural justice.

JUDGMENT :

1. Rule. By consent of learned counsel for parties, Rule made returnable forthwith and heard finally.

2. The present Writ Petition impugns,

i. Five show cause notices (“impugned notices”) issued by Respondent No.3 to Petitioner; and

ii. An order dated 30th March, 2022 (“impugned order”) passed by Respondent No. 3 against Petitioner.

3. The facts briefly stated are that between the years 2008 and 2009 Respondent No. 3 issued the impugned notices to Petitioner inter alia alleging that Petitioner had contravened provisions of the Cenvat Credit Rules, 2004. The impugned notices on this premise called upon Petitioner to show cause why Central Excise Duty along with interest and penalty should not be recovered from Petitioners. The details of the impugned notices (date, period and amount demanded) are as follows, viz.

4. Petitioner by its letter dated 26th July, 2008 replied to the show cause notice dated 3rd April, 2008 and denied the allegations made therein. Thereafter, by a letter dated 8th August, 2008 the Superintendent (Adjudication) Central Excise called upon Petitioner to furnish certain details duly certified by a Chartered Accountant. Petitioner by its letter dated 26th September, 2008 duly submitted the information sought for.

5. Respondent No. 3 after a lapse of almost 13 years from the date of the last impugned notice, fixed a personal hearing on 28th October, 2021. Petitioner filed written submissions on 27th October, 2021 inter alia pointing out that the proceedings now initiated by Respondents pursuant to the impugned notices were none-stand bad in law. Petitioner referred to and relied upon several judgements of this Hon’ble Court in support of the contention that since the show cause notices had not been acted upon within a reasonable period of time, the same were now stale and consequently any adjudication based thereon was bad in law and void. Petitioner thus requested Respondents to withdraw the impugned notices.

6. Respondents did not reply to Petitioner’s letter but instead, after a period of over five months fixed another date for personal hearing on 11th March, 2022. Petitioner’s representative attended the personal hearing before Respondent No. 3 and inter alia submitted:

a. that Respondent No. 3 did not have jurisdiction to continue the proceedings since the inquiry was in respect of show cause notices which were over 13 years old.

b. that the records pertaining to the case at hand were destroyed and/or untraceable.

c. that the officers of Petitioners acquainted with the facts of the case were no longer in Petitioners employment.

d. that grave prejudice would be caused to Petitioners if the impugned notices were adjudicated upon after such an inordinately long time.

7. Respondent No. 3 ignoring Petitioners contentions proceeded to pass the impugned order and confirmed a demand duty of Rs.1,65,12,218/-along with interest which amounted to 200% of duty amount. It was thus that Petitioners filed the present Writ Petition.

8. Mr. Hidayatullah, learned senior counsel, appearing on behalf of Petitioner made the following submissions viz.,

a. That the present case was squarely covered by a catena of judgements of this Hon’ble Court but laid special emphasis upon the case of (i) Raymond Ltd. vs. Union of India, 2019 (368) E.L.T. 481 (Bom) and (ii) Parle International Limited vs. Union of India, 2021 (375) ELT 633 (Bom). Before taking us to the said judgments Mr. Hidayatullah highlighted the following facts pertaining to the present case, namely, viz.

i. That all the show cause