High Court of Punjab and HaryanaCWP/11860/2021allowed

M/S Shree Baba Exports v. Commissioner And Another

2022-03-15Mr. Justice Ajay Tewari,Mr. Justice Pankaj Jain11 pages

IN THE HIGH COURT OF PUNJAB AND HARYANA

AT CHANDIGARH CWP No.11860 of 2021 Date of decision : March 15, 2022 M/s Shree Baba Exports through proprietor Ms. Jyotsna Agarwal

...Petitioner

Versus

Commissioner, GST & Central Excise, Commissionerate, Chd. and another

...Respondents

CWP No.11867 of 2021 M/s A.B. Industries through proprietor Mr. Ankush Bansal

...Petitioner

Versus

Commissioner, GST & Central Excise, Commissionerate-II, Chd. and another

...Respondents

CWP No.11941 of 2021 M/s Shiv Shakti Enterprises through proprietor Mr. Mukul Agarwal

...Petitioner

Versus

Commissioner, GST & Central Excise, Commissionerate-II, Chandigarh and another

...Respondents

CORAM:

HON'BLE MR. JUSTICE AJAY TEWARI HON'BLE MR. JUSTICE PANKAJ JAIN Present :

Mr. Rajat Mittal, Advocate for the petitioner.

Mr. T.K. Joshi, Advocate for the respondents.

PANKAJ JAIN, J.

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CWP No.

Date of show Cause Notice impugned CWP-11860-2021 31.12.2009 CWP-11867- 2021 12.03.2010 CWP-11941-2021 23.02.2010 3 ; 12

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; ""162 45 6".::1E 6E2 Siddhi Vinayak Syntex Private Limited vs Union of India', 2017 (352) E.L.T. 455; Special Leave Petition (C) No. 18214 of 2017 - 'Union of India and others vs M/s Siddhi Vinayak Syntex Private Limited', decided on 28.07.2017; 'Parimal Textiles vs. Union of India', 2018(8), GSTL 361 and that of the Supreme Court in 'State of Punjab vs. Bathinda District Co-op. Milk P. Union Limited', 2007(217) ELT 325'. &

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@, "Section 11A. Recovery of duties not levied or not paid or short-levied or short-paid or erroneously refunded.-

(1) Where any duty of excise has not been levied or paid or has been short-levied or short-paid or erroneously refunded,

for any reason, other than the reason of fraud or collusion or any wilful misstatement or suppression of facts or contravention of any of the provisions of this Act or of the rules made thereunder with intent to evade payment of duty,- (a) the Central Excise Officer shall, within one year from the relevant date, serve notice on the person chargeable with the duty which has not been so levied or paid or which has been so short-levied or short-paid or to whom the refund has erroneously been made, requiring him to show cause why he should not pay the amount specified in the notice;

(b) the person chargeable with duty may, before service of notice under clause (a), pay on the basis of,- (i) his own ascertainment of such duty; or (ii) duty ascertained by the Central Excise Officer, the amount of duty along with interest payable thereon under section 11AA.

(2) The person who has paid the duty under clause (b) of subsection (1), shall inform the Central Excise Officer of such payment in writing, who, on receipt of such information, shall not serve any notice under clause (a) of that sub-section in respect of the duty so paid or any penalty leviable under the provisions of this Act or the rules made thereunder.

(3) Where the Central Excise Officer is of the opinion that the amount paid under clause (b) of sub-section (1) falls short of the amount actually payable, then, he shall proceed to issue the notice as provided for in clause (a) of that sub-section in respect of such amount which falls short of the amount actually payable in the manner specified under that sub-

section and the period of one year shall be computed from the date of receipt of information under sub-section (2).

(4) Where any duty of excise has not been levied or paid or has been short-levied or short-paid or erroneously refunded, by the reason of- (a) fraud; or (b) collusion; or (c) any wilful mis-statement; or (d) suppression of facts; or (e) contravention of any of the provisions of this Act or of the rules made thereunder with intent to evade payment of duty, by any person chargeable with the duty, the Central Excise Officer shall, within five years from the relevant date, serve notice on such person requiring him to show cause why he should not pay the amount specified in the notice along with interest payable thereon under section 11AA and a penalty equivalent to the duty specified in the notice.

((5) to (7) xx xx xx) (7A) Notwithstanding anything contained in sub-section (1) or sub-section (3) or sub-section (4), the Central Excise Officer may, serve, subsequent to any notice or notices served under any of those sub-sections, as the case may be, a statement, containing the details of duty of central excise not levied or paid or short-levied or short-paid or erroneously refunded for the subsequent period, on the person chargeable to duty of central excise, then, service of such statement shall be deemed to be service of notice on such person under the aforesaid

sub-section (1) or subsection (3) or sub-section (4) or subsection (5), subject to the condition that the grounds relied upon for the subsequent period are the same as are mentioned in the earlier notice or notices.

(8) Where the service of notice is stayed by an order of a court or tribunal, the period of such stay shall be excluded in computing the period of one year referred to in clause (a) of sub-section (1) or five years referred to in sub-section (4), as the case my be.

(9) Where any appellate authority or Tribunal or court concludes that the notice issued under sub-section (4) is not sustainable for the reason that the charges of fraud or collusion or any wilful mis-statement or suppression of facts or contravention of any of the provisions of this Act or of the rulesmade thereunder with intent to evade payment of duty has not been established against the person to whom the notice was issued, the Central Excise Officer shall determine the duty of excise payable by such person for the period of one year, deeming as if the notice were issued under clause (a) of sub-section (1).

(10) The Central Excise Officer shall, after allowing the concerned person an opportunity of being heard, and after considering the representation, if any, made by such person, determine the amount of duty of excise due from such person not being in excess of the amount specified in the notice.

(11) The Central Excise Officer shall determine the amount of duty of excise under sub-section (10)- (a) within six months from the date of notice where it is possible to do so in respect of cases falling

under subsection (1);

(b) within one year from the date of notice, where it is possible to do so, in respect of cases falling under subsection (4) or subsection (5)."

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F - Siddhi Vinayak Syntex Private Limited vs Union of India', 2017 (352) E.L.T. 455' has held that @, "14. In the aforesaid case, Gujarat High Court had set aside the order passed after a long delay in pursuance to the show cause notice issued.

15. The judgment of Gujarat High Court was challenged by the revenue before Hon'ble the Supreme Court by filing Special Leave Petition (C) No. 18214 of 2017 - Union of India and others vs M/s Siddhi Vinayak Syntex Private Limited, in which notice has been issued only to the extent as to whether Circular No. 162/73/95-CX dated 14.12.1995, issued by the Central Board of Excise and Customs, Department of Revenue, Ministry of Finance, Government of India, is in conformity/ authorized by the provisions of Section 37-B of the Central Excise Act, 1944. The order on merit has been upheld vide order dated 28.7.2017.

16. The view expressed in M/s Siddhi Vinayak Syntex Private Limited's case (supra) was subsequently followed by Gujarat High Court in Parimal Textiles' case (supra), where again belated order passed after issuing show cause notice, was set

aside.

17. Section 11A(11) of the Act provides that Cental Excise Officer shall determine the amount of duty within six months in case notice has been under Sub-section 1 thereof, whereas in the case of fraud, collusion, etc., the period prescribed is one year. No doubt, the words 'where it is possible to do so' have been used, however, that will not stretch the period to decades as is in the cases in hand.

18. In Bhatinda District Co-op. Milk P. Union Limited's case (supra), Hon'ble the Supreme Court upheld a Division Bench judgment of this Court where opinion expressed was that where no period of limitation is provided for exercise of any power, any notice issued more than five years thereafter was held to be unreasonable.

19. For the reasons mentioned above, we find that the notices in the present cases having been issued more than decade back and the proceedings having not been concluded within reasonable time, the same deserves to be quashed." "

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@, =With regard to filing of the appeal before the Jammu & Kashmir High Court against order dated 28.08.2018 passed by CESTAT, Chandigarh pertaining to supplier of the petitioners (purchaser), it is held that it would have no bearing upon the findings recorded above, keeping in view the peculiar facts & circumstances of the case and law laid down referred to above. Moreover, the Jammu & Kashmir High Court has not granted any interim order in favour of the respondent(s)/ Revenue on the appeal filed after 1 1⁄2 year of passing of order of the Tribunal in case of supplier (seller) of

goods to the petitioner (purchasers)."

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(AJAY TEWARI) (PANKAJ JAIN) JUDGE JUDGE March 15, 2022 Dpr Whether speaking/reasoned :

Yes Whether reportable :

Yes