2005 (4) TMI 602 - HC - Central Excise

Summary

Issues: Challenge to order of Customs, Excise & Service Tax Appellate Tribunal (CESTAT) - Availment of credit under MODVAT Scheme - Failure of Tribunal to consider submissions - Duty of Tribunal to give reasoned order - Petition seeking quashing of orders dated 30th October, 2003 and 22nd June, 2004.

Analysis:

1. The petitioner, a partnership firm, had availed credit under the MODVAT Scheme in relation to three invoices during the Financial Year 1994-1995. Respondent No. 1 alleged that the credit was wrongly availed and issued a show-cause notice. The petitioner contended that their reply was not considered before disallowing the credit. The Order-in-Original was confirmed by respondent No. 2 - Commissioner (Appeals), leading the petitioner to appeal before CESTAT. The Court refrained from expressing an opinion on the merits due to the view it was inclined to take.

2. The impugned order dated 30th October, 2003, showed that the appellant-petitioner did not appear, but written submissions were filed. However, the order did not reflect the submissions made by the petitioner. The Tribunal disposed off the appeal without a proper consideration of the submissions, leading to a lack of reasoning in the order.

3. The Court emphasized the duty of the Tribunal to provide a reasoned order as per legal precedents. Referring to a previous case, the Court highlighted the importance of the Tribunal considering all facts and evidence before arriving at a conclusion. In the present case, the Tribunal failed to fulfill this duty, resulting in the quashing of the order dated 30th October, 2003.

4. Despite the petitioner's application for rectification of the order, the Tribunal rejected it, stating it had no authority to review. The petitioner had pointed out that the earlier order was non-speaking, but the Tribunal failed to acknowledge this. Consequently, the order dated 22nd June, 2004, was also quashed and set aside.

5. In the final decision, the petition was allowed, and the appeal was restored to the file of CESTAT. The Court directed CESTAT to consider the contentions raised by both sides, provide a fair hearing, and dispose off the appeal afresh on its merits. The ruling made no order as to costs, concluding the legal proceedings.