Tata Steel LTD Through Its Chief Legal Counsel Indirect Taxes Legal ( I And L) Vikash Mittal vs. Union Of INDIA Through The Commissioner Central GST And Central Excise

Held

The Court held that the adjudication of the show-cause notice dated December 9, 1993, after a lapse of 29 years, is contrary to the mandate of Section 11A(11) of the Central Excise Act, 1944, and leads to unreasonable and arbitrary results. The Court found that such proceedings are vitiated due to inordinate and unreasonable delay, violating the principles of natural justice. The Court relied on the judgments of the Bombay High Court in Eastern Agencies Aromatics Private Limited and the Punjab and Haryana High Court in GPI Textiles Limited, which held that unreasonable delay in adjudication contravenes procedural fairness and principles of natural justice. The Court noted that even if some explanation regarding the pendency of a Civil Appeal existed until May 5, 2004, there was no justification for not proceeding with the impugned show-cause notice for the subsequent 18 years. Consequently, the impugned show-cause notice dated December 9, 1993, and the notices for personal hearing dated November 30, 2022, and December 23, 2022, were quashed. The writ petition was allowed to the extent indicated.

Facts

The petitioner, Tata Steel Ltd. (Growth Shop), is challenging a show-cause notice dated December 9, 1993, issued by the Superintendent, Central Excise, Adityapur, pertaining to the period June 1993 to November 1993. The petitioner also seeks to quash subsequent notices for personal hearing dated November 30, 2022, and December 23, 2022, issued by the Superintendent (Adjudication). The petitioner contends that these proceedings have been resumed after 29 years, violating Section 11A(11) of the Central Excise Act, 1944. The dispute originates from an earlier show-cause notice in 1984 concerning the classification and duty on Electronic Overhead Cranes (EOCs) manufactured by the petitioner's Growth Shop. This matter has a long procedural history involving multiple High Court and Supreme Court proceedings, as well as appeals before the CEGAT.

Key Issues

1. Whether the adjudication of the show-cause notice dated December 9, 1993, after a lapse of 29 years, is permissible under Section 11A(11) of the Central Excise Act, 1944, and in accordance with principles of natural justice? Petitioner's Arguments: The petitioner argues that the inordinate delay of 29 years in adjudicating the show-cause notice renders the proceedings vitiated. They contend that such a delay is unreasonable and arbitrary, violating the principles of natural justice and the mandate of Section 11A(11) of the Central Excise Act, 1944. The petitioner relies on pronouncements from the Bombay High Court in Eastern Agencies Aromatics Private Limited and the Punjab and Haryana High Court in GPI Textiles Limited, which have quashed show-cause notices due to unreasonable delay in adjudication. The petitioner also disputes the respondents' assertion that the show-cause notice was kept in a call book, arguing no communication was received regarding this and that the conditions for transfer to the call book, as per CBIC guidelines, are not met. Respondents' Arguments: The judgment does not explicitly record arguments from the respondents regarding the delay. However, it notes their stand is based on the show-cause notice being kept in a call book pursuant to a waiver of pre-deposit granted in 1991. The judgment implies the respondents sought to justify the revival of the show-cause notice after a significant period.