2011 (6) TMI 438 - AT - Central Excise

Imposition of duty without considering facts on records - duty imposed on ground that buyers to whom the appellants cleared the excisable goods were related persons in terms of Section 4 of the Central Excise Act, 1944 - Held that - Commissioner while passing order has not considered facts on record and had just referred ti the provisions of law. In order to impose the duty liability against the assessee, it is not sufficient for the adjudicating authority merely to refer to the provisions of law. Primarily, he has to consider the facts and thereupon apply the correct provision of law to these facts and this exercise by the adjudicating authority should be apparent on the face of the order itself. Matter remanded to the Commissioner to decide afresh.

Summary

Issues involved: Whether the buyers were related persons under Section 4 of the Central Excise Act, 1944 justifying the demand of duty.

The judgment by the Appellate Tribunal CESTAT, DELHI involved an appeal arising from an order passed by the Commissioner confirming a duty demand, interest, and penalty. The main issue was whether the buyers of the excisable goods were related persons as per Section 4 of the Central Excise Act, 1944, justifying the duty demand. The Tribunal noted that the impugned order failed to consider the facts of the case adequately. While the Commissioner rightly formulated the issue in the order, there was a lack of factual analysis from para 7 onwards. The Tribunal emphasized that it is crucial for the adjudicating authority to not only refer to the provisions of law but also analyze the facts and apply the correct provision of law based on those facts. The Tribunal highlighted that the duty liability cannot be imposed solely by referring to legal provisions without considering the facts of the case.

The Tribunal concluded that the Commissioner's failure to consider the facts of the case rendered the impugned order unsustainable. As a result, the Tribunal set aside the order and remanded the matter back to the Commissioner for a fresh decision after hearing both parties and considering the relevant legal provisions in light of the observations made. It was explicitly stated that the Tribunal did not express any opinion on the merits of the case. The appeal succeeded on the limited ground of the Commissioner's failure to consider the facts, leading to the setting aside of the order and remanding of the matter for a fresh decision. The appeal was disposed of accordingly.