2005 (2) TMI 621 - AT - Central Excise

Summary

Issues: Excise duty demand, penalty imposition, under-valuation/under invoicing, Notification 8/97-C.E., DTA sales, supply of documents, personal hearing, benefit of Notification, remand

In the present case, the issues revolve around the excise duty demand of Rs. 4,60,45,160 against M/s. Euro Cotspin Ltd., along with penalties imposed on the company's Managing Director, Executive Director, Marketing Manager, and Excise Officer. The Department alleged that the company engaged in under-valuation/under invoicing while clearing goods in the Domestic Tariff Area (DTA) despite being an Export Oriented Unit (EOU). The case hinged on the interpretation of Notification 8/97-C.E., which granted exemptions for certain goods based on specific criteria. The Department contended that the goods cleared in the DTA were undervalued, leading to the demand and penalties.

The main contention raised by the appellant was the lack of supply of all relevant documents necessary for them to respond adequately to the show cause notice. The appellant argued that they were unable to file replies promptly due to the non-receipt of essential documents. Despite the Department's assertion that all documents were provided, discrepancies existed concerning the supply of specific annexures crucial for the appellant's defense. Moreover, the appellant's defense was deemed unavailable due to the absence of a reply to the show cause notice and the order being passed without hearing the appellants. The appellate tribunal found merit in the appellant's argument and emphasized the importance of a fair hearing and access to all relevant documents for a just decision.

The tribunal acknowledged the need to consider the appellant's plea regarding the extension of benefits under Notification 8/97, given that the Department did not contest the use of indigenous raw materials by the appellants. Although the adjudicating authority claimed to have offered multiple opportunities for a personal hearing which the appellants did not utilize, the tribunal deemed it necessary in the interest of justice to remand the case back to the Commissioner. The Commissioner was instructed to conduct a fresh hearing, consider the appellant's arguments, and issue a new order in compliance with the law after ensuring the supply of the required documents and allowing the appellant a fair opportunity to present their case. Consequently, the appeals were allowed by way of remand for a fresh adjudication.