2014 (9) TMI 808 - AT - Central Excise

Availment of in-eligible CENVAT Credit - Denial of cross examination request - Held that - Merely because the Commissioner was of the opinion that the petitioners had made such a request somewhat belatedly, would not permit him to, in the facts of the present case, deal with such an application only in the final order itself. Sum total of this discussion is that we are inclined to set-aside the impugned order and request the adjudicating authority to pass a separate order on the petitioners application/request letter for granting cross-examination of the named witnesses. We are conscious that the Commissioner has already decided such an issue, however, since we are quashing the order, this part of the order would also not survive and hence, the requirement of a fresh order. We are informed that the same officer continues to hold the office of the Commissioner of Customs & Central Excise, Surat-II. It would therefore, be not necessary to separately hear the petition once again before passing any such order. This would, however, not preclude the Commissioner from requiring the petitioners to show relevance for seeking cross-examination of the witnesses. Reasoning adopted by the adjudicating authority for coming to conclusion in the matter is incorrect and entire issue needs reconsideration as per the allegations put forth in the show cause notice in the case in hand - matter remanded back - Decided in favour of assessee.

Summary

Issues:
- Natural justice principles not followed by the adjudicating authority
- Reliance on statements of brokers and transporters
- Incorrect reliance on Order-in-Original of another case
- Need for cross-examination and personal hearing
- Findings should be based on show cause notice allegations

The judgment by Appellate Tribunal CESTAT AHMEDABAD involved several key issues. Firstly, the appellant argued that the adjudicating authority did not adhere to the principles of natural justice as they were not granted the opportunity for cross-examination of individuals whose statements were relied upon. The appellant contended that reliance on the statements of brokers and transporters was unjustified. Additionally, the appellant raised concerns about the incorrect reliance on an Order-in-Original from a separate case. On the other hand, the respondent highlighted the detailed findings of the adjudicating authority regarding the alleged in-eligible CENVAT Credit availed by the appellant.

The Tribunal observed that the adjudicating authority indeed failed to follow the principles of natural justice by not deciding on the appellant's request for cross-examination. Citing a High Court decision, the Tribunal emphasized the importance of informing the parties about the outcome of such requests before passing a final order. Consequently, the Tribunal set aside the impugned order and directed the adjudicating authority to address the cross-examination request separately and provide a personal hearing to the appellant.

Furthermore, the Tribunal noted that the reasoning used by the adjudicating authority to reach a conclusion was flawed, necessitating a fresh consideration of the entire issue based on the show cause notice allegations. Despite refraining from expressing an opinion on the case's merits, the Tribunal remanded the matter back to the adjudicating authority for a reevaluation after addressing the cross-examination applications and granting a personal hearing to the appellant.

In conclusion, the Tribunal emphasized that the adjudicating authority should confine their findings to the allegations and evidence presented in the show cause notice issued to the appellants. As a result, the impugned order was set aside, and all appeals were allowed for remand to the adjudicating authority. Additionally, a miscellaneous application for an extension of stay by another party was also disposed of in the judgment.