Aasu Plastic Private LTD. vs. Union Of INDIA

Held

The Court held that the show cause notices issued by the respondent No. 3 exhibited a complete non-application of mind. The Court found it unacceptable that the petitioner's refund claim, filed almost 16 years prior, remained undecided by the authority due to the alleged non-availability of original records. The Court questioned why, if the claim could not be processed due to missing materials, the authority did not take an appropriate decision one way or the other. The Court noted that the petitioner's counsel confirmed that records were reconstructed and furnished to the department on multiple occasions in the past for processing the claim. Consequently, the Court directed the respondents to decide the petitioner's refund claim in accordance with the law within two months of receiving the order. The petitioner was also directed to furnish all necessary and relevant documents to the department at the earliest if required for the purpose of looking into the claim. The Court did not delve into other controversies.

Facts

The petitioner, Aasu Plastic Private Ltd., engaged in manufacturing recycled nylon chips and plastic granules, filed a writ application challenging three show cause notices dated May 26, 2020, issued by the Assistant Commissioner, GST & Central Excise. These notices proposed to reject the petitioner's refund claim of Rs. 13,84,843/- for CVD/Excise duty, filed on April 29, 2004. The refund application was based on a CESTAT order, a Commissioner's order, Section 3(1) of the Customs Tariff Act, 1975, and excise duty paid under protest. Despite 16 years passing, the original refund application remained undecided. The show cause notices cited the non-availability of original records, the petitioner's alleged lethargic approach in following up, and the potential weeding out of old records as reasons for potential rejection. The petitioner argued that they had previously reconstructed and furnished records when requested.

Key Issues

1. Whether the show cause notices dated May 26, 2020, issued by the Assistant Commissioner, GST & Central Excise, proposing to reject the refund claim of Rs. 13,84,843/- filed by the petitioner on April 29, 2004, are legally sustainable, particularly in light of the prolonged delay in adjudication and the non-availability of original records, thereby violating principles of natural justice and Section 11B of the Central Excise Act, 1944? Petitioner's contention: The petitioner argued that the show cause notices exhibited a complete non-application of mind. They contended that the department's failure to decide the refund claim for 16 years due to lost records was unacceptable. They also stated that they had previously reconstructed and furnished necessary records when requested by the department. Revenue's contention: The revenue, through the show cause notices, proposed to reject the refund claim. Their primary grounds were the non-availability of original records, the petitioner's alleged lethargic approach in not following up for 15 years, and the possibility that old records were weeded out. They questioned the genuineness and authenticity of the claim due to the lack of original papers and the long delay.