2011 (2) TMI 433 - AT - Service Tax

Principles of Natural Justice - The claim of the respondents is that the credit wrongly taken was not utilized and therefore no interest was payable - There is no indication that the respondent was delaying the adjudication proceedings as the reply has been promptly submitted by the respondents as has been duly noted by the original authority - Apparently, the documents could not be produced by the respondents before the original authority - No doubt, that the matter could be directed to be dealt with by the Commissioner (A) or the matter could be dealt with by the Tribunal itself with the assistance of original authority - Held that - this course may not be desirable and deem it appropriate that the matter must be considered afresh by the original authority himself - The original authority should not be allowed to follow the short cuts after sleeping over the matter for nearly a year - the Commissioner (A) and the order of the original authority are set aside and the matter is remanded to the original authority for fresh consideration after giving reasonable opportunity of hearing to the respondents.

Summary

Issues:
Appeal against Commissioner (Appeals) order - Remand by Commissioner (A) - Violation of natural justice - Power of remand after amendment to Section 35A (3) - Need for fresh consideration by original authority.

Analysis:
The appeal before the Appellate Tribunal CESTAT, CHENNAI was filed by the department challenging the order of the Commissioner (Appeals) dated 31.05.2010. The respondents did not appear for the hearing and requested an adjournment, which was denied by the Tribunal. The case involved a Show Cause Notice issued in September'07, alleging a violation of Rule 4 (7) of the Cenvat Credit Rules, 2004, resulting in a demand of interest of Rs. 52,162 for the period December, 2005 to September, 2006. The original authority passed the order without granting a personal hearing, concluding that the respondents failed to substantiate their claim. The respondents contended before the Commissioner (A) that the credit was not utilized and requested verification of records. The Commissioner (A) remanded the matter to the original authority.

The Ld. SDR argued that post-amendment to Section 35A (3) of the Central Excise Act, the Commissioner (A) lacked the power of remand. Referring to a Supreme Court decision, the Ld. SDR contended against the remand. The Tribunal, after considering the submissions, held that the Commissioner (A) indeed lacked the power of remand post the amendment. Additionally, the Tribunal noted the violation of Principles of Natural Justice by the original authority for not granting a personal hearing. The Tribunal emphasized that the matter should be considered afresh by the original authority, highlighting the importance of due process and fair adjudication. The Tribunal set aside the orders of the Commissioner (A) and the original authority, remanding the matter to the original authority for a fresh consideration with a reasonable opportunity of hearing for the respondents.

In conclusion, the appeal was disposed of by the Tribunal, emphasizing the need for fair proceedings and adherence to principles of natural justice. The judgment highlighted the significance of granting a personal hearing and ensuring a thorough and just consideration of the matter by the original authority, underscoring the importance of due process in legal proceedings.