2006 (6) TMI 315 - AT - Central Excise

Summary

Issues involved:
Valuation of excisable goods - charges of undervaluation by transferring costs to non-excisable components. Allegations of undervaluation based on Rule 5 of Central Excise Valuation Rules, 1975. Compliance with natural justice principles - denial of hearing before passing an ex parte order by the Commissioner.

Valuation of excisable goods:
The issue in question pertains to the valuation of excisable goods, specifically Aerated Waters, involving allegations of undervaluation by transferring costs of excisable components to non-excisable components like crate hire charges, sales promotion, publicity charges, and bottle cleaning charges. The Notice was issued post a search operation and statements recording. The appellants cited a previous CEGAT order favoring a similar case and the subsequent remand by the apex court, leading to the dropping of proceedings by the jurisdictional Dy. Commissioner. The appellants argued that the present order was passed ex parte without granting them a hearing, emphasizing the need to allow the appeals based on the previous legal developments.

Compliance with natural justice principles:
The judgment highlighted a procedural flaw in the case concerning the denial of a hearing before passing the order by the Commissioner. The assessee had requested a personal hearing, providing relevant documents, and citing financial difficulties. Despite this, the order was issued without granting a hearing, leading to a conclusion that the assessee was not inclined to attend the hearing. The judgment emphasized the importance of natural justice principles, stressing that even if the Revenue had a strong case, the denial of a hearing was a violation of fundamental principles. Consequently, the order was set aside, and the matter was remitted back to the Commissioner with directions to grant a hearing, consider submissions, and ensure cooperation from the assessee in the adjudication proceedings.

Conclusion:
The judgment concluded by allowing the applications and appeals for a de novo decision after dispensing with the pre-deposit requirement. The decision was pronounced in court on 12-6-2006, emphasizing the significance of adhering to natural justice principles in legal proceedings.