2009 (3) TMI 669 - AT - Central Excise

Summary

Issues:
1. Recovery of outstanding dues from parties unconnected to the defaulter.
2. Applicability of legal provisions for recovery of dues.
3. Jurisdiction of the Original Adjudicating Authority in issuing notices.

Analysis:
1. The case involved the recovery of outstanding dues amounting to Rs. 8,79,536/- from parties unconnected to the defaulter, M/s. S.R. Dyeing & Printing Mills, who operated on leased premises. The jurisdictional Superintendent of Central Excise issued notices to three parties to recover the dues, leading to an appeal before the Commissioner (Appeals) by the parties concerned.

2. The Commissioner (Appeals) held that the appellants were not defaulters as defined in the Rules, as no duty or penalty had been confirmed against them by the Collector of Central Excise. The impugned orders were set aside, allowing the appeals of the parties. However, the Commissioner clarified that the order would not prevent fresh proceedings for recovery of dues as per the Collector's order of 13-12-1993, emphasizing the need for reasoned orders in such proceedings.

3. The Revenue contended that the matter was not adjudicated by the Original Adjudicating Authority, as the letter dated 10-5-2006 was only a demand notice and not an adjudication order. The parties had not made representations or defenses to the authorities issuing notices but had directly appealed to the Commissioner (Appeals). Citing legal precedents, the Revenue argued for the recovery of arrears from successor companies, which was opposed by the parties' advocate on the grounds of lack of connection between the parties and the defaulter.

4. The Tribunal found that the letter dated 10-5-2006 was indeed a notice of demand and not an adjudication order. As the submissions made by the parties before the Commissioner (Appeals) were not presented to the Original Adjudicating Authority, the Tribunal set aside the impugned order and remanded the matter to the Assistant Commissioner for a reasoned adjudication order. The parties were granted an opportunity to present their case before the adjudicating authority, emphasizing that no opinion was being expressed on the merits of the case.

5. In conclusion, the impugned order was set aside, and all appeals were remanded to the Original Adjudicating Authority for a fresh decision. The Revenue's appeals were allowed by way of remand, ensuring a fair opportunity for the parties to present their case before the adjudicating authority.