PARIMAL TEXTILES Vs. UNION OF INDIA

JUDGEMENT

(1.) These petitions arise in common background. We may refer to facts from Special Civil Application No. 8940/2017.

(2.) The petitioners have challenged the order-in-original dated 28-2-2017. They have also challenged the show cause notice dated 27-6-2000 which led the said order-in-original being passed.

(3.) The petitioners are engaged in textile business. Disputes between the petitioners and the department concerns the petitioners' process known as Draw Winding of yarns. The department issued show cause notice dated 27-6-2000 contending inter alia that during the visit by the excise authority of the unit of the petitioners, it was found that there were two Draw Winding units in the premises where the process was going on for its own purpose as well as on job work basis. For such purpose, the petitioners had not obtained any registration certificate from the Central Excise authority nor were they maintaining any central excise records. According to the department, the input i.e. Partially Oriented Yarn (POY) and the final product i.e. yarn were two distinct products having different names, characteristics and use and therefore, the process amounted to a manufacturing activity. Under the show cause notice, the petitioners were asked to state why central excise duty of Rs. 32.93 lacs not be recovered with interest and penalty. The petitioners replied to such show cause notice and opposed the proposal. After that the issues remained dormant at the end of the department for years together. Case of the petitioners is that in the meantime the unit closed down. The petitioners sold off the premises to developers. The petitioners did not receive any further notices from the department reviving the show cause notice herein till finally the petitioners learned that the adjudicating authority had passed the said order-in-original dated 28-2-2017.