2010 (5) TMI 490 - AT - Central Excise

Appeal limitation Pre deposit - The appellant had not received the intimation of personal hearing. It is obvious that the appellants had not received the order u/s 35F to make pre-deposit issued by the Commissioner (Appeals). In the circumstances, we dispense with the requirement of pre-deposit under Section 35F of the Act to hear the instant appeals. As the impugned orders had been passed without hearing the appellants, we remand the matter for a fresh decision by the Commissioner (Appeals) following principles of natural justice. Service of order order passed in March 2004 and appeal filed in June 2009 order not received by assessee - orders had been dispatched to a wrong address - no evidence that the appellants received the impugned orders - orders had not been served on 2004 but in June 2009 - no delay to be condoned - application for condonation of delay rejected as infructuous.

Summary

Issues Involved:
1. Condonation of delay in filing the appeal.
2. Waiver of pre-deposit of dues.
3. Allegations of clandestine manufacture and clearance of cement.
4. Non-receipt of orders and violation of principles of natural justice.
5. Imposition of penalties under various sections and rules.

Detailed Analysis:

1. Condonation of Delay in Filing the Appeal:
The application for condonation of delay (COD) was filed by M/s. Banjara Cements Ltd. (BCL) and its Managing Director, Shri M.M. Reddy, citing the non-receipt of the impugned orders due to the closure of the factory and subsequent sale to financial institutions. The appellants argued that they received the impugned orders only on 6-6-2009, despite the orders being dispatched in December 2004. The Tribunal found that the orders were sent to an incorrect address and not received by the appellants. Therefore, the delay was not attributable to the appellants, and the application for condonation of delay was deemed unnecessary and rejected as infructuous.

2. Waiver of Pre-Deposit of Dues:
The appellants sought a stay on the pre-deposit of dues confirmed against them. The Tribunal noted that the impugned order was passed ex parte without providing the appellants an opportunity for a hearing. Given the circumstances and the violation of natural justice, the Tribunal dispensed with the requirement of pre-deposit to hear the appeals.

3. Allegations of Clandestine Manufacture and Clearance of Cement:
The Commissioner (Appeals) upheld the original authority's order demanding duty of Rs. 17,24,138/- for clandestine manufacture and clearance of cement by BCL, along with applicable interest and penalties under Section 11AC of the Central Excise Act and Rule 173Q of the Central Excise Rules, 1944. The findings were based on unaccounted receipt of raw materials and private records seized from the appellants. The Tribunal did not delve into the merits of these allegations, focusing instead on procedural fairness.

4. Non-Receipt of Orders and Violation of Principles of Natural Justice:
The appellants contended that they were not heard before the impugned orders were passed, violating the principles of natural justice. The Tribunal observed that the intimation letters for personal hearings were returned undelivered and that the orders were dispatched to an incorrect address. Consequently, the Tribunal found that the appellants were not given a fair opportunity to present their case and remanded the matter to the Commissioner (Appeals) for a fresh decision following the principles of natural justice.

5. Imposition of Penalties:
Penalties were imposed on BCL and Shri M.M. Reddy under various sections and rules for the alleged clandestine activities. The Tribunal, considering the procedural lapses and non-receipt of orders, remanded the matter for a fresh adjudication, thereby setting aside the penalties imposed without a proper hearing.

Conclusion:
The Tribunal concluded that the impugned orders were not served on the appellants in December 2004 but only in June 2009. Consequently, there was no delay in filing the appeals. The Tribunal remanded the cases to the Commissioner (Appeals) for a fresh decision, ensuring adherence to the principles of natural justice. The stay applications and appeals were disposed of accordingly.