Order Date: 5 August 2022

Facts-

• The Petitioner, JCBL Limited, is engaged in fabricating the bodies on chassis received from manufacturers of chassis. 
• After manufacturing the bodies on such chassis, petitioner cleared such motor vehicles without payment of excise duty claiming exemption under Notification No. 06/2006-CE. 
• Revenue, however, was of the view that petitioner has wrongly availed of the exemption inasmuch as Cenvat Credit on the input consumed in the manufacture of bodies manufactured on duty paid chassis received from independent owners of the chassis had been taken and the vehicles so manufactured had been cleared for payment of applicable central excise duty. 
• Accordingly, two show cause notices were served in the year 2008. The matter were not adjucated thereafter and were informed to put on call book.
• Petitioner in order to settle proceedings filed two declarations under Section 124(1)(a)(ii) of the SVLDRS Scheme both dated 23.12.2019. Petitioner treated the amount paid (by way of reversal of the Cenvat Credit) at the rate of 10% of the exempted goods under Rule 6 of the Credit Rules as an amount to be adjusted while calculating the total amount under the SVLDRS Scheme. 
• The respondent disagreed with the petitioner’s computation. Petitioner contended that that the amounts already paid were liable to be adjusted while payment of 50% of the tax dues in terms of Section 124(2). 
• Hence the Instant writ petition has been filed assailing the afore-noticed two show cause notices.

Issue-

• Whether the impugned show cause notice is sustainable?

Order-

• The Division Bench of Hon’ble High Court observed that the issue as regards inordinate delay in adjudication of the show cause notices as per Section 11(A) of the Central Excise Act, 1944 came to be dealt with exhaustively by a Division Bench of this Court in M/s Shree Baba Exports through proprietor Ms. Jyotsna Agarwal vs. Commissioner, GST & Central Excise, Commissionerate, Chandigarh and another) , wherein it was held that it is clear that in Section 11-A(11), the legislature has prescribed a time limit. The Authority(s) are duty bound to abide by the same. The expression “where it is possible to do so” provided in the said section does not mean that the time prescribed can be extended perpetually. 
• In the present case, no explanation has been offered in the written statement which can be held to be a plausible explanation for not adjudicating upon the Show Cause Notice within the time prescribed.
• In the facts of the present case the impugned show cause notices were issued in the year 2008 and the same have not been adjudicated upon and transferred to the Call Book as per CBIC guidelines. There are no cogent basis for not adjudicating upon the show cause notices within the time prescribed.
• The Court therefore held that the impugned show cause notices cannot sustain as there has been an inordinate delay in adjudication of the same.
• The Petition filed by the petitioner is allowed.