Prem Cables Private LTD. vs. The Assistant Commissioner, CGST Div.-D

Facts

The petitioners, P G Foils Limited and Prem Cables Private Limited, are manufacturers challenging show cause notices issued between 2007 and 2012 for Central Excise Duty demands. These notices were allegedly consigned to the 'Call Book' due to pending litigation before the Supreme Court. Proceedings were revived in 2020-2021, with intimations for personal hearings sent to the petitioners. The petitioners argue that they were not informed about the transfer to the Call Book and that the revival after such a long period is unjustified. The respondents are the Assistant Commissioner, Superintendent (Adjudication), and Commissioner of CGST.

Held

The Court held that the revival of proceedings after a long gap of ten to fifteen years, without any plausible explanation for the delay and without informing the petitioners about the transfer to the 'Call Book', is unlawful and arbitrary, vitiating the entire proceedings. The Court found that the concept of the 'Call Book', as implemented by the CBEC, is contrary to the statutory mandate of Section 11A of the Central Excise Act, which prescribes time limits for determining duty where possible. The Court noted that the CBEC has no statutory power to extend time limits for years to await decisions in other cases. Furthermore, the reason cited for placing the cases in the Call Book, the pendency of M/s. J.K. Cement Works case in 2012, was itself subsequent to the issuance of some of the original show cause notices (as early as 2007), making it an invalid justification. Consequently, the impugned show cause notices, revival notices, and any consequential orders were quashed. The Court allowed the writ petitions.

Key Issues

1. Whether the revival of show cause notices issued between 2007 and 2012, after being consigned to the 'Call Book' and revived in 2020-2021, is legally sustainable, particularly in light of the time limits prescribed under Section 11A of the Central Excise Act, 1944, and the principles of natural justice? Petitioner's arguments: The petitioners contend that the revival notices are invalid because they were not informed of the original notices being placed in the Call Book. They argue that the delay of over a decade in reviving the proceedings is arbitrary and violates their right to a fair hearing, as they may have lost evidence. They also assert that the concept of the 'Call Book' and the instructions for its use by the CBEC are contrary to the statutory provisions of the Central Excise Act. Revenue's arguments: The judgment does not explicitly record arguments made by the revenue. However, the revival of proceedings implies the revenue's stance that the delay was justified due to pending Supreme Court matters and that the 'Call Book' mechanism was a valid administrative practice.