The failure to adhere to statutory time limits and procedural requirements under Section 11-A of the Central Excise Act invalidates the proceedings initiated by the respondent.

ORDER

The petitioner has filed this writ petition challenging the impugned show cause notice dated 11.12.2007 issued by the respondent under Section 11-A of the Central Excise Act (in short “the Act”) on the following grounds:-

(a) Pursuant to the issuance of the impugned show cause notice dated 11.12.2007, the respondent has not determined the amount of duty of excise payable by the petitioner within the statutory period as prescribed under Section 11-A (11)(a)(b) of the Act, which makes it clear that pursuant to the issuance of show cause notice under Section 11-A (1) of the Act, the respondent shall determine the amount of duty of excise as per the provisions of sub-section 11(a) of Section 11-A within a period of six months from the date of issuance of show cause notice in respect of cases falling under sub-section (1) of Section of Section 11-A of the Act; or within two years from the date of notice in respect of cases falling under sub-section(4) of Section 11-A of the Act.

(b) Section 11-A of the Act deals with recovery of duties not levied or not paid or short-levied or short-paid or erroneously refunded. The recovery sought for by the respondent under the impugned show cause notice from the petitioner pertains to the period from April, 2006 to February, 2007. In the instant case, the show cause notice was issued by the respondent under Section 11-A (1) of the Act to the petitioner on 11.12.2007. A detailed reply was sent by the petitioner to the said show cause notice on 21.12.2007 denying the contentions of the respondent. An additional reply was also sent by the petitioner to the respondent on 16.02.2008. After a lapse of almost 16 years, the respondent has sent a notice of personal hearing dated 28.07.2023 to the petitioner regarding the very same issue contended by the respondent through their show cause notice dated 11.12.2007.

2. The learned standing counsel appearing for the respondent would submit that there was no delay on the part of the respondent to issue a show cause notice. According to her, even as per the provisions of Section 11-A (11)(a)(b) of the Act, there is no time limit prescribed for passing the final order. According to her, since the respondent department has contested the audit objection with regard to determination of excise duty on the petitioner, there was a delay on the part of the respondent. Therefore, according to her, the question of interference by this Court with the impugned show cause notice does not arise and on the contrary, a direction may be given to the petitioner to participate in the personal hearing proceedings and thereafter, the respondent will be in a position to pass final orders, after giving due consideration to the replies sent by the petitioner to the impugned show cause notice.

3. However, as seen from Section 11-A of the Act, several procedural steps are involved before the respondent actually determines the duty payable by the petitioner to the respondent. Section 11-A (11)(a) is the first step to be taken by the respondent for recovering the duties not levied or not paid or short-levied or short-paid or erroneously refunded. It is not in dispute that the respondent has issued the impugned show cause notice within the time limit in accordance with Section 11-A (1) of the Act. Admittedly, the petitioner had sent replies to the impugned show cause notice within the time stipulated as stated supra. The determination of duty by the respondent will arise only after affording the petitioner an opportunity of being heard, and after considering the representation given by the petitioner, if any, as seen from Section 11- A(10)(11) of the Act. In the case on hand, the procedure contemplated under Section 11-A (10)(11) of the Act has not been followed by the respondent. Section 11-A (10)(11) of the Act reads as follows:-

11-A:- Recovery of duties not levied or not paid or short-levied or short-paid or erroneously refunded. ---

(10) The Central Excise Officer