Time limit for adjudication of Central Excise cases – officers are a happy lot now
WE received this mail from yet another netizen.
The Finance Bill, 2001 proposed substitution of section 11A with a new one and section 11A (11) therein read thus –
“(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 in respect of cases falling under sub-section (1);
(b) within one year from the date of notice in respect of cases falling under sub-section (4) or sub-section (5).”
A similar provision viz. sub-section (2A) that existed in the earlier section 11A read –
“ (2A) Where any notice has been served on a person under sub-section (1), the Central Excise Officer,-
(a) in case any duty of excise has not been levied or paid or has been short-levied or short-paid or erroneously refunded, by reason of fraud, collusion or any willful mis-statement or suppression of facts, or …, where it is possible to do so, shall determine the amount of such duty, within a period of one year; and
(b) in any other case, where it is possible to do so, shall determine the amount of duty of excise …, within a period of six months, from the date of service of the notice on the person under sub-section (1).”
The proposed provision generated a lot of debate in the Adjudication Section of the local Central Excise Commissionerates.
Sample the contents of the heated discussion –
+ there is no excuse left for the adjudicating authority to delay the adjudication process – removal of the words “where it is possible to do so” does away with the liberty that existed, if any;
+ the words “from the date of service of the notice” have been unwittingly replaced by the words “from the date of the notice”.
An officer remarked - the yard stick prescribed by the Central Government to decide the cases within the period of six months (normal period) and within one year (extended period) is not an easy task for an adjudicating authority and all the more surreal because the period is to be computed from the date of the notice. At least the period could have been made to commence from the date of communication of the notice to the noticee.
Another officer had this sound advice –
+ This provision would apply only to Show Cause notices issued after 8th April, 2011 and would not cover SCNS where the duty demand pertains to clearances made before 8th April, 2011;
+ The word “shall determine” needs to be read as “may determine”. As per Justice G.P.Singh's treatise 'Principles of Statutory Interpretation' the word 'may' may also be used in the sense of 'shall' or 'must' by the Legislature. When the context shows that the power is coupled with an obligation, 'the word 'may' which denotes discretion should be construed to mean a 'command'. Sagar Textiles Mills (P) Ltd. AIR 1977 SC 1516. As such, it is not at all mandatory that the notices should be decided within the time frame prescribed by the new section.
Fortunately, before the Finance Bill, 2011 was enacted, by introducing a Notice of Amendments on 21.03.2011 the words “where it is possible to do so” were inserted and the Finance Bill came to be enacted accordingly on 08 th April, 2011.
The provisions of section 11A(11) now read –
“(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 sub-section (1);
(b) within one year from the date of notice where it is possible to do so in respect of cases falling under sub-section (4) or sub-section (5).”
Resultantly, the earlier time limit for adjudication of the SCNs is retained. However, the fact remains that the words “service of” (notice) remains to be incorporated.
But that is not a worrisome issue, the officers unanimously agreed.