2012 (4) TMI 382 - AT - Central Excise

Confirmation of the demand of duty, interest and equivalent amount of penalty with imposed penalty on the director of the company clandestine removal - Held that - Assessee was denied grant of the copies of relied upon documents for upholding the charge against him - the adjudicating authority passed an ex-parte order upheld by first appellate authority without considering their grounds of appeal though assessee did not have any documents with them when they filed the appeal before the first appellate authority and had proceeded only on the basis of Show Cause Notice and the Order-in-Original the adjudicating authority has erred in confirming the demand without following the principles of natural justice - remanded matter back to adjudicating authority to reconsider it afresh - against revenue

Summary

Issues: Violation of principles of natural justice in confirming demand of duty, interest, and penalty due to clandestine removal of goods.

In this case, the appellant challenged the Order-in-Appeal that confirmed the demand of duty, interest, and penalty on the company due to alleged clandestine removal of finished goods and raw material. The appellant argued that the lower authorities violated the principles of natural justice by not providing them with the relied-upon documents necessary for their defense. The appellant's counsel had written to the adjudicating authority requesting copies of documents, but the authority proceeded with an ex-parte order. The appellate authority upheld this decision without considering the appellant's grounds of appeal regarding the violation of natural justice. The appellant claimed they did not have the documents when filing the appeal before the appellate authority, but the Revenue argued otherwise. Upon reviewing the submissions and letters from the appellant's counsel, the judge found that the authorities erred in not providing the documents requested, which hindered the appellant's ability to respond effectively to the Show Cause Notice. The judge concluded that the lower authorities' failure to follow natural justice principles warranted setting aside the orders and remanding the matter to the adjudicating authority for reconsideration after providing the necessary documents to the appellant. The judge emphasized that any order passed in violation of natural justice principles must be corrected, and the matter should be reconsidered following due process.

Overall, the judgment highlighted the importance of adhering to principles of natural justice in adjudicating matters involving allegations of misconduct. The failure to provide essential documents to the appellant for their defense was deemed a violation of natural justice, leading to the orders being set aside for reconsideration. The judgment emphasized the need for fairness and procedural correctness in administrative proceedings, ensuring that parties have a meaningful opportunity to present their case and respond to allegations effectively.