2006 (1) TMI 477 - AT - Central Excise

Summary

Issues:
1. Breach of principles of natural justice regarding personal hearing.
2. Confirmation of duty demand, penalty under Sec. 11AC, and penalty under Rule 173Q(1).

Analysis:

Issue 1 - Breach of principles of natural justice regarding personal hearing:
The appellants contended a breach of natural justice principles due to the lack of a personal hearing before the adjudication order. However, the Tribunal found no merit in this plea as multiple opportunities for a hearing were provided, which the appellants did not utilize. The argument that the order was passed ex-parte due to the unavailability of the adjudicating officer during a fixed hearing was dismissed. The appellants' claim of not receiving copies of certain documents referred to in the order was also rejected since those documents pertained to seized/detained goods released to a third party and not directly relevant to the appellants' case. The Tribunal upheld that the duty demand and penalties imposed on the appellants were based on substantial evidence, including a note book recovered from the factory premises with confirmed entries by the power of attorney holder, indicating clandestine clearances.

Issue 2 - Confirmation of duty demand, penalty under Sec. 11AC, and penalty under Rule 173Q(1):
The Tribunal acknowledged that the Department successfully established clandestine clearances of man-made processed fabrics by the appellants. The duty demand was deemed sustainable, albeit reduced by a specific amount representing cleared goods with paid duty. The total demand was reduced to Rs. 9,71,172/- along with applicable interest. A penalty under Sec. 11AC was upheld but reduced to Rs. 2,50,000/- considering the circumstances. However, the penalty under Rule 173Q(1) was set aside. The appeal was partly allowed based on the above determinations.

In conclusion, the Tribunal addressed the issues of breach of natural justice principles and the confirmation of duty demand and penalties meticulously, providing a detailed analysis of the evidence and legal provisions. The judgment balanced the findings with the appellants' contentions, ultimately resulting in a partial allowance of the appeal with adjusted duty demand and penalties.