2012 (12) TMI 649 - AT - Central Excise

Breach of principle of natural justice - Assessee paid the duty by availing the CENVAT Credit prematurely AO issue SCN and issue notice for public hearing Held that - As the assessee had requested for adjournment of the personal hearing afforded them, which was also acknowledged, however, the impugned Order was subsequently passed ex parte without giving any finding for not granting adjournment. Issue needs to be remanded to the Commissioner to decide the case afresh, by granting the effective hearing to the Appellant. Issue remand back to AO

Summary

Issues:
- Denial of natural justice in decision-making process
- Allegation of premature availing of CENVAT Credit
- Imposition of penalty without effective hearing

Issue 1: Denial of natural justice in decision-making process

The Appellant filed an Appeal against the Order-in-Original confirming the proposal in the Demand-cum-Show Cause Notice. They contended that they were denied an effective hearing, breaching the principle of natural justice. The Appellant had requested adjournment due to the absence of their authorized signatory, but the Order was passed ex parte without considering their request. The Appellant had paid the total duty involved along with interest, and they were paying the duty regularly. The Tribunal cited previous judgments emphasizing the importance of fair hearings and set aside the impugned order, remanding the case to the Commissioner for a fresh decision after granting proper opportunity of hearing.

Issue 2: Allegation of premature availing of CENVAT Credit

The Appellant, engaged in the manufacture of excisable products, faced allegations of prematurely availing CENVAT Credit on nine occasions. The Show Cause Notice proposed a demand for duty along with a penalty. The Appellant argued that they had paid the total duty involved along with interest and were paying the duty regularly. Despite this, the learned Commissioner confirmed the demand and imposed a penalty. The Appellant contended that the decision was a breach of natural justice. The Tribunal found that the case was decided without granting the Appellant an effective hearing, leading to a remand for a fresh decision considering the Appellant's submissions and compliance with duty payments.

Issue 3: Imposition of penalty without effective hearing

The learned Commissioner confirmed the demand of duty and imposed an equal amount of penalty without granting the Appellant an effective hearing. The Appellant had requested adjournment due to the absence of their authorized signatory, but the Order was passed ex parte. The Tribunal found that the decision was made in breach of natural justice and directed the Commissioner to decide the case afresh after providing the Appellant with an effective hearing. The Appellant's compliance with duty payments and interest was highlighted, emphasizing the need for a fair decision-making process. The Appeal was allowed by way of remand, ensuring the Appellant's right to a proper hearing and consideration of all relevant aspects in the case.