2002 (1) TMI 683 - AT - Central Excise

Summary

Issues:
Violation of principles of natural justice due to non-service of show cause notice under sub-section (3) of Section 35A of the Central Excise Act, 1944.

Analysis:
The appeal was filed against an Order-in-Appeal on the grounds of no notice being issued for enhancing penalty or confiscating goods. The appellant's counsel argued that the Order-in-Appeal was passed without serving notice, citing various judgments in their favor. They contended that since there was no violation and the goods were not confiscable under Rule 173Q, the penalty imposed was unjust. The counsel also pointed out discrepancies in figures attributed to fraud by a third party, absolving the appellant of responsibility. Additionally, they argued that clandestine removal from the factory was not proven, and the Commissioner did not counter the original authority's findings regarding the applicability of Rule 173Q.

The Departmental Representative argued that intentional alteration of figures justified the penalty imposed and that the goods were provisionally released on bond, making them subject to confiscation. They relied on a Tribunal judgment to support their position. The DR maintained that notices were sent to the appellant's address, even though some were returned due to insufficient address or refusal by the appellant.

The Judge, after considering the submissions and records, found a violation of natural justice due to the non-service of the show cause notice under Section 35A. The case was remanded to the Commissioner (Appeals) for fresh notice issuance, providing grounds for penalty enhancement and confiscation. The Judge emphasized the need for the Commissioner to review relevant judgments, including the one cited by the department, and grant the appellants a fair hearing before passing a new order. The appeal was allowed for remand to ensure procedural fairness and compliance with principles of natural justice.