M/S J S Pigments PVT LTD And Anr vs. Commissioner Of CGST And Central Tax,Howrah Commissionerate And Ors

Held

The Court held that the challenge to the show cause notice was rightly rejected by the learned Writ Court and affirmed that part of the order. Regarding the return of documents under Rule 24A, the Court found it "too late" for the appellants to insist on the 30-day time limit, given their multiple writ petitions and the fact that the order dated January 28, 2022, was passed pursuant to a previous court direction. The Court stated that the question of invoking the 30-day limit under Rule 24A did not arise. Concerning the extended period of limitation under Section 11A, the Court deemed it a mixed question of law and fact, to be agitated by the appellants while replying to the show cause notice. The Court acknowledged the appellants' submission that they needed effective opportunity to examine documents for an effective reply. To fulfill principles of natural justice, the Court directed that the second respondent permit the appellants' authorized representative to peruse all documents referred to in the show cause notice and the order dated January 28, 2022, and take photostat copies at their cost. The appellants were granted 10 clear days to peruse the documents and 15 days thereafter to submit their reply. Adjudication was to commence thereafter and be completed within 45 days from the date of reply, after affording a personal hearing. The relief for outright return of documents was not granted at this stage.

Facts

The appellants, M/s. J.S. Pigments Private Limited & Anr., filed a writ petition challenging an order dated January 28, 2022, and a show cause notice dated September 4, 2017, issued by the second respondent. They sought to quash these, declare them invalid, and compel the return of seized documents (both relied upon and non-relied upon). The writ petition was dismissed. The appellants then filed the present appeal. They argued that Rule 24A of the Central Excise Rules, 2002, was violated as non-relied upon documents were not returned within 30 days of the show cause notice. They also contended that the extended period of limitation under Section 11A of the Central Excise Act, 1944, was wrongly invoked. The revenue argued that the order dated January 28, 2022, was a speaking order and the adjudication should proceed.

Key Issues

1. Whether the appellants are entitled to the return of non-relied upon documents seized during search operations in accordance with Rule 24A of the Central Excise Rules, 2002, considering the delay in their return and the pendency of adjudication? 2. Whether the extended period of limitation under Section 11A of the Central Excise Act, 1944, was rightly invoked by the revenue? Petitioner's Arguments: The appellants argued that the revenue violated Rule 24A of the Central Excise Rules, 2002, by failing to return non-relied upon documents within 30 days of the show cause notice dated September 4, 2017. They contended that this denial of documents prevented them from submitting an effective reply, thus violating principles of natural justice. They also argued that no case was made out for invoking the extended period of limitation under Section 11A of the Act. They stated they no longer wished to press the relief sought to quash the show cause notice. Revenue's Arguments: The revenue contended that the order dated January 28, 2022, was a speaking order passed after due application of mind and that the authority should be permitted to adjudicate the show cause notice.