2011 (4) TMI 427 - HC - Central Excise

Natural justice - Ex-parte order - Tribunal the impugned order dated 26-11-2008 was passed ex-parte as the notices were not received by the assessee-company but the same were received by the former Manager whose services were already terminated - This is the violation of the principles of natural justice as per the doctrine of Audi Alterm Partem - Hence set aside both the impugned orders and the matter back to the Tribunal to decide the appeals filed by the department de novo but by providing reasonable opportunity to the assessee.

Summary

Issues: Violation of principles of natural justice in serving notices, Ex-parte order, Doctrine of Audi Alterm Partem

In the judgment delivered by Dr. Satish Chandra, J., the court addressed the issues arising from writ petitions filed against the orders passed by the Customs, Excise & Service Tax Appellate Tribunal, New Delhi. The case involved a manufacturer of Cement who was charged with Excise Duty for extra cement packed in bags sold to customers. The Assessing Officer (A.O.) made additions, but the First Appellate Authority later deleted them. The department appealed to the Tribunal, which set aside the First Appellate Authority's order and reinstated the additions in an ex-parte order. The assessee moved recall applications, which were rejected. The main contention was the improper service of notices, as they were received by a former Manager whose services were terminated, violating the principles of natural justice under the doctrine of Audi Alterm Partem. The court highlighted the importance of proper notice service, citing relevant case laws like Safari Merchantile v. ITAT and CIT v. Bhan Textiles (P) Ltd.

The court found that the impugned orders were passed ex-parte due to improper notice service, leading to a violation of natural justice principles. The Tribunal failed to consider this aspect when the recall applications were filed. Consequently, the court set aside the Tribunal's orders and remanded the matter back for de novo consideration, emphasizing the need to provide a reasonable opportunity to the assessee. It was clarified that if the assessee failed to cooperate, the appeals would be decided as per law. The judgment aimed to uphold the principles of natural justice and ensure a fair hearing for all parties involved in the legal proceedings.

In conclusion, the court disposed of both writ petitions by addressing the issues of improper notice service, ex-parte orders, and the doctrine of Audi Alterm Partem. The judgment underscored the significance of adhering to procedural fairness and providing parties with a fair opportunity to present their case, ultimately ensuring justice and equity in the legal process.