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2011 (6) TMI 581 - HC - Central ExciseWrit Petition - natural justice - grievance of the Petitioner arises out of the fact that the Commissioner passed a revised order on 30 November 2010 purporting to revise the production capacity and the monthly duty liability. The monthly duty liability was sought to be revised from Rs. 95 lacs to Rs. 285 lacs and the Petitioner was directed to pay the liability before commencing the production Held that - Deputy Commissioner passed an order dated 4 January 2011 revising the annual production capacity and the monthly duty liability in respect of all the four machines. No hearing was afforded to the Petitioner before the Deputy Commissioner did so. order dated 4 January 2011 has now been quashed and set aside on the ground of a breach of the principles of natural justice, in Writ Petition 967 of 2011. Petitions would accordingly stand disposed of.
Issues:
1. Validity of order passed by Deputy Commissioner of Central Excise 2. Principles of natural justice violation 3. Lack of jurisdiction of Deputy Commissioner 4. Contrary orders by Commissioner (Appeals) Issue 1: Validity of order passed by Deputy Commissioner of Central Excise The Petitioners challenged the validity of an order passed by the Deputy Commissioner of Central Excise, Pune, in suo moto revision of determination orders. The challenge was based on various grounds, including violation of natural justice principles, lack of jurisdiction, and contradiction with previous orders by the Commissioner (Appeals). The Petitioner, engaged in manufacturing pan masala subject to central excise duty, installed packing machines in the factory. The dispute arose when the Deputy Commissioner revised the production capacity and monthly duty liability without providing a hearing or valid justification. The Court found that the Deputy Commissioner's actions breached natural justice principles and set aside the impugned order, directing a fresh determination after affording the Petitioner an opportunity to be heard. Issue 2: Principles of natural justice violation The Court noted that the Deputy Commissioner revised the duty liability without hearing the Petitioner or presenting any new material to justify the revision. The Petitioner had sought protection to file an appeal against the order, and interim relief was granted by the Court. Subsequently, when the Deputy Commissioner revised the duty liability again without a hearing, the Court found a clear violation of natural justice principles. As a result, the impugned order was quashed on the grounds of procedural unfairness. Issue 3: Lack of jurisdiction of Deputy Commissioner The Petitioner contended that the Deputy Commissioner lacked jurisdiction to revise the production capacity and duty liability without proper justification or adherence to legal procedures. The Court found merit in this argument, especially considering the absence of a valid reason or hearing before the revision. The lack of jurisdiction, coupled with the violation of natural justice, led the Court to set aside the impugned order and direct a fresh determination in accordance with the law. Issue 4: Contrary orders by Commissioner (Appeals) The challenge also included the contention that the impugned order contradicted previous orders by the Commissioner (Appeals). The Court observed that the Deputy Commissioner's actions, including the revision of duty liability, were not supported by any new material or valid reasons. This inconsistency, along with the procedural flaws, further strengthened the Court's decision to quash the order and remand the matter for a fresh determination after providing the Petitioner with a hearing opportunity. In conclusion, the Court set aside the impugned order of the Deputy Commissioner, emphasizing the importance of adhering to natural justice principles and ensuring jurisdictional validity in administrative decisions. The rights and contentions of the parties were kept open for further proceedings before the Deputy Commissioner, and both petitions were disposed of without any costs awarded.
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