2007 (3) TMI 473 - AT - Central Excise

Summary

Issues: Appeal against penalty imposition due to lack of proper opportunity for defense.

In this judgment by the Appellate Tribunal CESTAT, New Delhi, the issue revolved around an appeal filed by the revenue against the setting aside of a penalty of Rs. 5,000/- imposed on the respondent by the Commissioner (Appeals). The revenue contended that if the respondent was not given a proper opportunity to defend the case, the matter should have been remanded to the adjudicating authority. The revenue argued that the respondent's actions indicated duty evasion, thus justifying the penalty.

Upon examination, it was found that the Commissioner (Appeals) had based the decision on the fact that the show cause notice (SCN) was initially issued to a different assessee and later corrected to be issued to the present respondent. The Commissioner (Appeals) noted that no proper show cause notice was issued to the respondent, and no personal hearing was granted before passing the adjudication order. The adjudicating authority failed to follow the principles of natural justice by not providing the respondent with an opportunity to be heard before imposing the penalty.

The Tribunal upheld the findings of the Commissioner (Appeals) as the revenue did not contest the factual position that no show cause notice was issued to the respondent before the adjudication order. Consequently, the Tribunal found no fault in the decision to set aside the penalty and dismissed the appeal. The judgment highlights the importance of adhering to procedural fairness and providing parties with adequate opportunities to present their case before imposing penalties in such matters.