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2025 Supreme(Online)(DEL) 935
HIGH COURT OF DELHI
Yashwant Varma, Harish Vaidyanathan Shankar, JJ
PARAS PRODUCTS – Appellant
Versus
COMMISSIONER CENTRAL GST DELHI NORTH – Respondent
W.P.(C)-6235/2023
Mr. D. S. Nagi, Adv., Mr. Ramachandran, SSC with Mr. Prateek Dhir, Adv., Mr. Aditya Singla, SSC with Ms. Arya Suresh and Mr. Siddharth Saxena, Advs.
The court emphasized that inordinate delays in adjudication of tax matters cannot be justified and must be resolved expeditiously, reinforcing the obligation of authorities to act promptly.
Headnote:(A) Central Excise Act, 1944 - Section 11A - Central Excise Rules, 2002 - Confiscation of goods and imposition of penalty for contravention of the Rules - Writ petitions challenge the inordinate delay of over 11 years in adjudication proceedings - Court emphasizes the obligation of authorities to conclude adjudication with due expedition and that delay cannot be condoned without plausible justification. (Paras 10, 15, 22)
(B) Delay in Adjudication - The court held that lengthy delays in adjudication proceedings, especially those with financial liabilities, cannot be justified and must be resolved in a timely manner. (Paras 15, 21)
(C) Legal Precedents - Court relied on Vos Technologies India and other cases to establish the principle that statutory authorities must act promptly and cannot use legislative provisions as excuses for inaction. (Paras 10, 21)
Facts of the case:
The petitioners, engaged in manufacturing footwear, challenged the confiscation of goods and penalties imposed due to alleged contraventions of the Central Excise Rules, following a search conducted in 2011. The initial Show Cause Notice was issued in 2011, but adjudication was delayed until 2022 and 2023.
Findings of Court:
The court found that the respondents failed to justify the 11-year delay in adjudication, quashing the impugned Orders-in-Original and directing the release of the bank guarantee.
Issues: The main issues were the justification for the lengthy delay in adjudication and the validity of the confiscation and penalties imposed.
Ratio Decidendi: The court ruled that authorities must conclude adjudication promptly and that delays without valid reasons undermine the legitimacy of the process.
Result: The impugned Orders-in-Original were quashed, and the bank guarantee was ordered to be released.
JUDGMENT :
HARISH VAIDYANATHAN SHANKAR, J.
1. This batch of writ petitions seeks to assail the Orders-In- Original, [1OsIO] dated 30.12.2022 [in W.P.(C) 6235/2023] and 02.03.2023 [in W.P.(C) 6376/2023 & W.P.(C) 6648/2023] (hereinafter referred to as “the impugned OsIO”) passed by the Respondents, whereby, inter alia, the Petitioners‟ goods were confiscated under Rule 25 of the Central Excise Rules, 2002 (hereinafter referred to as “the Rules”) and penalty was imposed on the Petitioners for contravention of the provisions of the Rules. These petitions also seek the release of the Bank Guarantee furnished at the time of release of the seized goods.
BRIEF FACTS:
2. On 29.04.2011, pursuant to receipt of information, the Anti- Evasion Wing of the Central Excise, Delhi-1, conducted searches and effected seizures under the Central Excise Act, 1944 (hereinafter “the Act”) from the premises of the Petitioner firms and that of Mr. Parmod Kumar Jain. A panchnama of the seized goods was duly drawn. Mr. Parmod Kumar Jain was the proprietor of M/s Paras Products and M/s Sai Enterprises, and his son, Mr. Ankit Jain, was the proprietor of M/s Jaina Polymers. During search, the following materials were seized at the premises:
| S. No. | Goods seized from the premises (M/s) | Description of seized goods | Seizure value (INR) | Total Value (INR) |
| 1. | Petitioner in W.P.(C) 6235/2023 | Finished goods | 10,97,496 | 39,95,816 |
| Raw Materials | 8,34,300 | |||
| Scrap | 1,34,020 | |||
| Moulds | 39,95,816 | |||
| 2. | Petitioner in W.P.(C) 6376/2023 | Finished goods | 9,59,900 | 18,47,750 |
| Raw Materials | 1,87,850 | |||
| Tata 407 vehicle | 7,00,000 | |||
| 3. | Petitioner in W.P.(C) 6648/2023 | Finished goods | 35,760 | 90,510 |
| Raw Materials | 54,750 |
3. The Petitioner firms were engaged in the manufacturing and clearance of footwear and soles falling under Chapter headings 6402 and 6406 of the Central Excise Tariff Act, 1985.
4. Further to this search, a common Show Cause Notice, [2SCN] dated 25.10.2011 came to be issued and on the passage of the Central Goods and Services Tax Act, [3CGST Act], 2017, the jurisdiction of the Respondent authorities altered and two (2) impugned OsIO came to be issued.
5. Two SCNs dated 25.10.2011 and 30.12.2014 came to be issued to the Petitioners. One in respect of the seized goods and the other for the offended goods (past clearances).
6. A common SCN dated 25.10.2011 was issued by Deputy Commissioner(AE), Central Excise, Delhi-1, to the Petitioners to show cause, as to: -
(a). Why the seized goods should not be confiscated under Rule25 of the Rules [w.r.t. all Petitioner firms],
(c). Why penalty should not be imposed under Rule 25 for contravention of the provisions of the Rules [w.r.t. all Petitioner firms].
7. The second SCN dated 30.12.2014 was issued to the Petitioner firms, proposing to demand duty in respect of offended goods cleared in the past. The said SCN was adjudicated vide Order-in-Original dated 28.08.2015 by Additional Commissioner, Central Excise, Delhi- 1. In terms of the Order-in-Original, the duty demanded and interest and penalties imposed were paid, and in so far as the SCN dated30.12.2014 is concerned, the same need not engage our attention.
8. It is the first SCN dated 25.10.2011 that will require our attention. This came to be adjudicated only on 30.12.2022 and02.03.2023 vide two separate OsIO (the impugned OsIO).
9. The impugned OIO dated 30.12.2022 was in relation to the Petitioner in W.P.(C) 6235/2023, whereas, the impugned OIO dated 02.03.2023 was in relation to the Petitioners in W.P.(C) 6376/2023 &W.P.(C) 6648/2023.
SUBMISSIONS OF THE PARTIES:
10. The principal ground to assail the Impugned OsIO is the inordinate delay in the finalization of the adjudication proceedings, which is more than 11 years in both cases. It is in this regard that the Petitioners seek to draw sustenance from this Court‟s judgments in Vos Technologies India (P) L
