2008 (5) TMI 595 - AT - Central Excise

Summary

Issues:
1. Rejection of request for transfer of Modvat credit balance.
2. Principles of natural justice and issuance of speaking order.
3. Maintainability of appeal against a letter issued by Assistant Commissioner.

Analysis:
1. The appellant was aggrieved by the rejection of their request to transfer the unutilized balance of Modvat credit from their unit in Bangalore to their unit in Hyderabad. The issue arose when the Assistant Commissioner denied the transfer through a letter dated 26-8-2005. The appellant sought permission for the transfer, highlighting the importance of the request.

2. The appellant contended that the rejection lacked the principles of natural justice as they were not given an opportunity to be heard, and a speaking order was not issued. The counsel argued that the authorities should have followed due process and issued a speaking order after considering the request made by the appellant. The Commissioner's decision was questioned for not adhering to the principles of natural justice.

3. The Departmental Representative pointed out a previous order by the Single Member Bench of the Tribunal, stating that an appeal is not maintainable against a letter issued by the Superintendent. Similarly, the DR argued that the appeal under Section 35A of the Central Excise Act could not be based on a letter issued by the Assistant Commissioner on behalf of the Commissioner. However, the Tribunal disagreed with this interpretation.

4. The Tribunal, comprising Dr. S.L. Peeran and Shri T.K. Jayaraman, held that the Commissioner should have provided an opportunity for a hearing to the appellants and issued a speaking order considering the transfer of credit request. The Tribunal emphasized that any communication through officers cannot substitute a speaking order. Therefore, the matter was remanded back to the Commissioner with a directive to conduct a rehearing within four months and pass a speaking order in compliance with the principles of natural justice.