2014 (7) TMI 526 - AT - Central Excise

Duty demand - Clandestine removal of goods - Excess receipt of raw material - Violation of principles of natural justice - Allegation based upon recovery of the transporters documents from their place read with railway receipts - Held that - Neither the railway receipts nor the transporters documents have been supplied to the appellants. Instead, a tabulated chart prepared by the Revenue, on the basis of the said recovered documents stands given. Similarly, instead of railway receipts, only the covering letter of the General Divisional Manager along with the chart of list of railway receipts stand apply to the appellants - Following decision of Satya Power and Ispat Pvt. Ltd. Vs. CCE&ST, Raipur 2014 (7) TMI 502 - CESTAT NEW DELHI - Matter remanded back - Decided in favour of assessee.

Summary

Issues: Violation of principles of natural justice in passing the impugned order, demand of duty confirmed against M/s. Kalindi Ispat (P) Ltd. based on allegations of clandestine removal, non-provision of relevant railway receipts and transport documents by the Revenue, reliance on a report without providing necessary documents to appellants, denial of cross-examination of witnesses, comparison of railway receipts without actual supply to appellants, previous case remanded for similar reasons, necessity of depositing part amount in case of clandestine activities.

The judgment by the Appellate Tribunal CESTAT NEW DELHI, delivered by Hon'ble Mrs. Archana Wadhwa, addresses the issue of violation of principles of natural justice in the impugned order passed against M/s. Kalindi Ispat (P) Ltd. The Tribunal found a demand of duty confirmed based on allegations of clandestine removal of sponge iron due to excess receipt of raw-materials, i.e., iron ore. However, it was noted that the Revenue failed to provide the relevant railway receipts and transport documents to the appellants, relying instead on a report without necessary documentation. The appellants were unable to defend themselves adequately as they were not provided with the essential documents, leading to a lack of fair adjudication. The denial of the appellants' request for cross-examination of witnesses further undermined their ability to present a proper defense.

In a similar case involving Satya Power and Ispat Pvt. Ltd., the matter was remanded after the Revenue supplied the relied-upon documents to the assessee during the appeal process. The Tribunal highlighted the importance of providing necessary documents to the assessee for a fair and just adjudication process. The failure to supply crucial documents to the appellants was deemed against the principles of fair adjudication, necessitating a fresh decision by the originating authority while ensuring the appellants are provided with all relevant documents and given the opportunity for cross-examination.

The Tribunal emphasized the significance of disclosing and supplying requisite material to the assessee when relying on documents recovered from third-party premises. The judgment underscored the need for fair adjudication, expressing dissatisfaction with the non-supply of essential documents to the appellants. As a result, the impugned order was set aside, and the matter was remanded to the original adjudicating authority for a fresh decision, ensuring the principles of natural justice are observed. The appellants were instructed to be provided with all documents and have their request for cross-examination reconsidered to facilitate a fair and just resolution of the case.

Ultimately, the Tribunal disposed of both the stay petitions and appeals by setting aside the impugned order and remanding the matter for a fresh decision, emphasizing the importance of upholding principles of natural justice and ensuring the appellants' right to a fair adjudication process.