2009 (2) TMI 682 - AT - Central Excise

Summary

Issues:
1. Waiver of pre-deposit and stay of recovery of duty demand along with penalties.
2. Allegations of fraudulent Cenvat credit utilization and duty demand confirmation.
3. Denial of natural justice due to non-supply of essential documents.
4. Remand for de novo adjudication and provision of necessary documents.

Analysis:

Issue 1: Waiver of pre-deposit and stay of recovery
The appellant firm and its partners filed applications seeking waiver of pre-deposit and stay of recovery of duty demand amounting to Rs. 17,12,252/- along with penalties imposed. The duty demand was confirmed against them based on alleged irregularities in availing Cenvat credit and clearances of goods without payment of duty.

Issue 2: Allegations of fraudulent Cenvat credit utilization
The Department alleged that the appellant firm had taken Cenvat credit of Rs. 1,65,24,493/- without actually receiving any material, based on investigations revealing discrepancies in invoices from suppliers in Surat. The Commissioner confirmed a duty demand of Rs. 1,71,02,252/- and imposed penalties on the firm and its partners under relevant provisions of the Central Excise Act.

Issue 3: Denial of natural justice
During the proceedings, the appellant argued that denial of natural justice occurred as essential documents, including letters from the Assistant Commissioner, Central Excise, Surat, and manufacturers denying supplying material, were not provided to them. The non-supply of these critical documents was acknowledged, leading to a finding of denial of natural justice by the Tribunal.

Issue 4: Remand for de novo adjudication
Considering the serious lacuna of denial of natural justice in the impugned order, the Tribunal set aside the decision and remanded the matter to the Commissioner for de novo adjudication. The Tribunal directed the Commissioner to provide the withheld documents to the appellants, grant a personal hearing, and ensure adjudication by a specified deadline to address the issues raised.

This detailed analysis of the judgment highlights the key issues, arguments presented by both sides, findings of the Tribunal, and the ultimate decision to remand the case for further adjudication while emphasizing the importance of ensuring natural justice and procedural fairness in legal proceedings.