2012 (5) TMI 537 - AT - Central Excise

Duty demand - Ex parte order - Requested documents not supplied - Held that - Perusal of the impugned order clearly shows that the same is an ex parte order passed without supplying the audit report and other documents requested by the Appellant and without hearing the Appellant in person while Section 14A(5) provides that the assessee shall be given an opportunity of being heard in respect of any material gathered on the basis of the Audit and proposed to be utilized in any proceedings under the Act and the Rules made thereunder. The impugned order is, therefore, set aside and the matter is remanded to the original adjudicating authority for de novo adjudication after supplying the audit report and other required documents and granting opportunity of personal hearing - Decided in favour of assessee.

Summary

Issues: Duty demand confirmation based on Cost Accountant report, violation of natural justice, opportunity of being heard, remand for re-adjudication.

Duty Demand Confirmation Based on Cost Accountant Report:
The judgment pertains to the confirmation of duty demand against the appellant based on the report of the Cost Accountant appointed under Section 14A(1) of the Central Excise Act, 1944. The original adjudicating authority's decision confirming duty demand, interest, and penalty was upheld by the Commissioner (Appeals), leading to the filing of the present appeal along with a stay application. The tribunal, after hearing both sides, decided to proceed with the appeal itself for final disposal, waiving the requirement of pre-deposit with the consent of both parties.

Violation of Natural Justice:
The appellant's counsel argued that the Department proceeded with the case ex parte without providing the requested documents, including the approval letter appointing the Cost Accountant and the audit report. This lack of document supply hindered the appellant's ability to present a proper defense and challenge the procedure under Section 14A of the Act. The tribunal acknowledged that the impugned order was indeed ex parte, passed without supplying the audit report and other requested documents, thus violating the principles of natural justice.

Opportunity of Being Heard:
Section 14A(5) mandates that the assessee should be given an opportunity to be heard regarding any material gathered during the audit and proposed for use in proceedings under the Act and related rules. The tribunal found that the appellant was not granted this opportunity in the present case, leading to the decision to set aside the impugned order and remand the matter to the original adjudicating authority for fresh adjudication. The tribunal directed the authority to supply the audit report and other necessary documents and provide the appellant with a personal hearing opportunity.

Remand for Re-Adjudication:
In conclusion, the tribunal set aside the impugned order and remanded the matter for de novo adjudication, emphasizing the importance of providing the appellant with the necessary documents and a chance for a personal hearing. The appeal and stay application were disposed of in light of the remand for re-adjudication, ensuring that the principles of natural justice and the opportunity of being heard were upheld in the proceedings.