Case Law Details
Maxcare Laboratories Ltd. Vs Joint Commissioner (Orissa High Court)
Conclusion: Reviving of assessee’s case after 18 years, the Opposite Parties had acted unreasonably particularly since assessee could not have reasonably expected that the proceedings against it would be kept alive for these many years without any action being taken and also, assessee could not be expected to preserve its records for these many years and to be able to answer a SCN after 18 years.
Held: Assessee-company was carrying on business of manufacturing of perfumed hair oil and red tooth powder having its plant at Mancheswar Industrial Estate. It was stated that the plant had been closed since long and assessee had no business operation in the State of Odisha. The first impugned show cause notice (SCN) was issued by the Commissioner, Central Excise and Customs (Opposite Party 2) proposing a demand of excise duty in the sum of Rs.75,65,511/- invoking the extended period of limitation in terms of the proviso to Section 11A(1) of the Central Excise Act, 1944 (‘CE Act’) and Rules 9 (2) of the Central Excise Rules, 1944 (‘CE Rules’). The SCN alleged that assessee had suppressed production of perfumed hair oil and red tooth powder and removed surreptitiously the said excisable goods without payment of central excise duty during the year 1994-95. The SCN further stated that in course of verification of the RT-5 returns of assessee for the year 1994-95, it was observed that assessee had not shown the expected production as per the production norms which had been declared by letter dated 16th December, 1995. The suppressed quantity, according to SCN, works out to 3,19,961.00 liters of perfumed hair oil and 1,23,608 kg of red tooth powder which were in contravention of Rules 53, 173G and 226 of the CE Rules. Assessee replied to the SCN on 16th December, 1995 and did not hear anything from the Opposite Parties and all of a sudden, more than 17 years later on 28th December, 2017 received a fresh SCN on the same issue with reference to the earlier SCN dated 29th March, 2000 and stating that a personal hearing was fixed on 9th January, 2018. It was held that nothing was indicated in the counter affidavit about the Board specifically ordering this case kept pending by entry in the ‘call book’. In effect, the attempt to revive the proceeding after 18 years appeared to contrary to the circulars issued generally by the Department for expeditious disposal of the SCNs. No convincing explanation was offered as to why the Department sat over the matter for 18 years. By not informing assessee that its case was being transferred to the ‘call book’, and then seeking to revive it after 18 years, the Opposite Parties had acted unreasonably particularly since assessee could not have reasonably expected that the proceedings against it would be kept alive for these many years without any action being taken. Also, assessee could not be expected to preserve its records for these many years and to be able to answer a SCN after 18 years.
FULL TEXT OF THE JUDGMENT/ORDER OF ORISSA HIGH COURT
Dr. S. Muralidhar, CJ
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