2014 (3) TMI 9 - HC - Central Excise

Principle of natural justice - passing an order nine months after the conclusion of hearing - Duty demand under Section 11A(2) - Equivalent penalty has also been imposed under Section 173Q(bb) of the Central Excise Rules, 1944 - Held that - authorities under the Act are obliged to dispose of proceedings before them as expeditiously as possible after the conclusion of the hearing. This alone would ensure that all the submissions made by a party are considered in the order passed and ensure that the litigant also has a satisfaction of noting that all his submissions have been considered and an appropriate order has been passed. It is most important that the litigant must have complete confidence in the process of litigation and that this confidence would be shaken if there is excessive delay between the conclusion of the hearing and delivery of judgment. Delay by the Adjudicating Authority in rendering its order nine months after the conclusion of the hearing has caused prejudice to the Petitioner as it has not considered the evidence produced in respect of return of goods within 180 days - we set aside the impugned order dated 31 July 2013 and direct the Additional Commissioner of Central Excise and Customs to pass a fresh order after granting the Petitioner an opportunity of personal hearing - Decided in favour of assessee.

Summary

Issues:
Challenge to order of Additional Commissioner of Central Excise - Delay in passing impugned order - Prejudice caused to Petitioner - Consideration of submissions - Circular by Central Board of Central Excise and Customs - Applicability of previous court decisions - Obligation to dispose of proceedings expeditiously - Confidence in litigation process - Setting aside impugned order - Directing fresh order with personal hearing.

Analysis:
The petition challenged the order of the Additional Commissioner of Central Excise dated 31 July 2013, confirming a duty demand and imposing a penalty under the Central Excise Act, 1944. The Petitioner contended that the delay in passing the order, almost nine months after the conclusion of the hearing, led to serious prejudice as the order did not consider their submissions, including evidence of goods returned within 180 days. Reference was made to a circular directing expeditious orders and court decisions emphasizing timely judgments. The Petitioner sought the impugned order to be set aside for a fresh order after a personal hearing.

The Revenue's counsel argued that no prejudice was caused by the delay, and the Petitioner could appeal the order under the Act. The Court noted that the delay resulted in the Petitioner's submissions not being considered, despite available evidence. Referring to previous court decisions, the Court highlighted the importance of timely judgments to maintain litigant confidence in the legal process. The Court found that the delay in passing the order had indeed prejudiced the Petitioner, necessitating the setting aside of the impugned order.

The Court emphasized the obligation of authorities to dispose of proceedings promptly post-hearing to ensure all submissions are considered and maintain litigant confidence. Given the prejudice caused by the delay in this case, the Court set aside the impugned order and directed the Additional Commissioner to pass a fresh order after granting the Petitioner a personal hearing. The Court did not require the Petitioner to pursue an appeal, as the impugned order did not meet the court's parameters. The resultant adjudication order was to be passed promptly after the hearing granted to the Petitioner.

In conclusion, the Court allowed the petition, setting aside the impugned order, and directed the Additional Commissioner to issue a fresh order after a personal hearing, ensuring prompt adjudication. No costs were awarded in this matter.