2013 (1) TMI 170 - AT - Central Excise

Cenvat credit on invoices issued by non-existing entity - assessee contested against non serving of SCN & OIO - Held that - The adjudicating authority in his order in original has mentioned that lower authorities tried their level best to find out the actual address of the appellant bot on perusal of the letter dated 27.05.05 written by the CA of the appellant, it is very clear that the superintendent of Central Excise in-charge was kept informed about the change in address who has communicated order in original to the appellant. Thus the impugned order which has been passed is in violation of the principles of natural justice is to be set aside as there was no effective hearing granted to appellant. Appellant directed to file a reply to the show cause notice within four weeks from today on receipt which the adjudicating authority will consider the issue afresh, after granting a personal hearing to the appellant.

Summary

Issues:
1. Failure to serve show cause notice and order in original on the appellant.
2. Allegation of availing cenvat credit on invoices from a non-existing entity.
3. Violation of principles of natural justice due to lack of effective hearing.

Analysis:
1. The appellant contended that the show cause notice and order in original were not served on them, leading to a lack of opportunity to respond. The appellant highlighted a letter sent to the authorities informing them of a change in address, indicating that the communication was not effectively received. The Tribunal acknowledged the failure in service and deemed the impugned order as violating the principles of natural justice due to the absence of proper hearing granted to the appellant.

2. The appellant was accused of availing cenvat credit on invoices issued by a non-existing entity. The appellant's counsel argued that if given another chance, they would promptly respond to the show cause notice and cooperate with the authorities. The Tribunal directed the appellant to file a reply within four weeks for the adjudicating authority to reconsider the issue after granting a personal hearing, indicating a fair opportunity for the appellant to present their case.

3. The Tribunal, after hearing the arguments from both sides, found that the adjudicating authority failed to locate the appellant despite being informed of the change in address. This failure to effectively communicate with the appellant resulted in a violation of the principles of natural justice. Consequently, the Tribunal allowed the application for waiver of pre-deposit and remanded the case back to the adjudicating authority for a fresh consideration, emphasizing the importance of granting a fair hearing to the appellant.

This judgment highlights the significance of ensuring proper service of notices and orders to parties involved in legal proceedings to uphold the principles of natural justice and provide a fair opportunity for all parties to present their case. The decision to remand the case for a fresh consideration with a directive for a personal hearing underscores the importance of procedural fairness in administrative and legal processes.