Delay in conclusion of proceedings pursuant to show cause notices without proper explanation is unlawful and arbitrary, and the concept of call book is contrary to the statutory mandate.

Rajesh Bindal, J.

1. This order will dispose of two writ petitions bearing CWP Nos. 10530 and 10707 of 2017, involving identical issues.

2. Civil Writ Petition No. 10530 of 2017 has been filed challenging show cause notices dated 27.12.2001 (Annexure P-1), 28.8.2002 (Annexure P-2), 3.1.2003 (Annexure P-3), 2.4.2003 (Annexure P-4), 4.8.2003 (Annexure P-5).

3. In Civil Writ Petition No. 10707 of 2017, challenge has been made to show cause notice dated 13.9.2006 (Annexure P-1).

4. Challenge has also been made to circular dated 29.9.2016 issued by the Ministry of Finance (Department of Revenue), Central Board of Excise & Customs, New Delhi, in both the writ petitions.

5. Learned counsel for the petitioner primarily argued that proceedings in the case in hand deserve to be quashed only on account of inordinate delay in disposal thereof. Show cause notices were issued way back in the years 2001, 2002, 2003 and 2006. Thereafter, the department remained silent. The reasons assigned in the notice was regarding audit objection raised by the AG (Audit), Shimla, pertaining to the year 2000-01. Section 11A of the Central Excise Act, 1944 (for short, 'the Act'), deals with recovery of duty not levied or not paid or short levied or short paid or erroneously refunded. Sub-section (11) thereof provides that as far as possible in normal cases, the proceedings should be concluded within a period of six months, whereas in the case of fraud, collusion, etc., the period prescribed is one year. In the case in hand, the proceedings are pending for the last more than 16 years when fresh notice for date of hearing was issued on 3.5.2017.

6. In support of plea, reliance was placed upon judgment of Gujarat High Court in Siddhi Vinayak Syntex Private Limited vs Union of India 2017 (352) E.L.T. 455. In the aforesaid case, even the order passed 17 years after the issuance of show cause notice was set aside. It was further submitted that Special Leave Petition (C) No. 18214 of 2017 – Union of India and others vs M/s Siddhi Vinayak Syntex Private Limited filed against the aforesaid order was dismissed by Hon'ble the Supreme Court on 28.7.2017, as far as the merits of the controversy concerned. Hon'ble the Supreme Court had issued notice only to examine the question as to whether Circular No. 162/73/95-CX dated 14.12.1995, issued by the Central Board of Excise and Customs, Department of Revenue, Ministry of Finance, Government of India, is in conformity/ authorized by the provisions of Section 37-B of the Central Excise Act, 1944.

7. Further reliance was placed upon subsequent order passed by the Gujarat High Court in Parimal Textiles vs Union of India 2018 (8) G.S.T.L. 361, which is to the same effect.

8. Reliance was also placed upon judgment of Hon'ble the Supreme Court in State of Punjab vs Bhatinda District Co-op. Milk P. Union Limited 2007 (217) E.L.T. 325, where period of five years was held to be reasonable in the absence of any time provided in the Act. The case in hand is even better. The maximum period provided herein is one year.

9. Learned counsel for the petitioner further submitted that issue regarding keeping the cases pending on account of transfer thereof in the call book has also been dealt with by Gujarat High Court.

10. On the other hand, learned counsel for the respondents submitted that show cause notices were issued to the petitioner on the basis of audit objection raised by AG (Audit), Shimla. As the audit objection was contested by the department, as per Circular No. 385/18/98/CX dated 30.3.1998, the cases were transferred to the call book. The provisions of Section 11-A of the Act only provide that order should be passed within the period prescribed, as far as possible. There is no definite time limit prescribed. In any case, the petitioner will not suffer any prejudice as he will be afforded due opportunity before passing any order against him. The matters which were transferred to the call book have now been taken up in view of the