2014 (9) TMI 865 - AT - Central Excise

Validity of passing a fresh adjudicating order after withdrawal of earlier adjudication order - The Apex Court recorded that since the Order-in-Original dated 30-3-2009 is being withdrawn, practically nothing survived in these matters. We grant permissions to the respondent/department to withdraw the said order. It is, however, made clear that further action, if any, could be proceeded with in accordance with law - Held that - Prima facie, in view of withdrawal of the earlier adjudication order dated 30-3-2009, without reserving liberty to proceed from a stage subsequent to the stage of the show cause notice dated 20th February, 2008 against M/s. Garg Industries and all other concerned parties, we find no lawful authority for passing a fresh adjudication order viz. the impugned order - there is no power, authority or jurisdiction consecrated under the provisions of the Excise Act, 1944, enabling withdrawal of an adjudication order; and that no power inheres in the adjudicating authority to review its own order, either. It is also not clear from the record as to which authority withdrew the order dated 30-3-2009 and in exercise of what power. We are also unable at this stage, to conclude that the order of withdrawal of the earlier adjudication order is non est, since the factum of such withdrawal is incorporated in the Supreme Court s order dated 19-8-2011 - impugned adjudication order, prima facie appears unsustainable. We therefore grant waiver of pre-deposit in full and stay further proceedings for realisation of the adjudicated liability, during pendency of the appeals - Stay granted.

Summary

Issues:
1. Validity of the adjudication order dated 31-3-2013 confirming Excise duty demand, penalty, and redemption fine.
2. Legality of passing a fresh adjudication order after the withdrawal of the earlier order dated 30-3-2009.
3. Authority and jurisdiction to withdraw an adjudication order under the Excise Act, 1944.

Analysis:
1. The appeals were filed against the adjudication order dated 31-3-2013, which confirmed Excise duty demand, penalty, and redemption fine on the appellants. The order imposed penalties on specific individuals and the principal appellant jointly. It was noted that a significant amount had already been remitted towards the duty demand.

2. The case presented peculiar features where a show cause notice was initially issued to specific parties only, leading to an adjudication order assessing duty demand and penalties on parties not afforded due process. Subsequent legal proceedings, including a writ petition before the High Court and a special leave petition before the Supreme Court, resulted in the withdrawal of the adjudication order dated 30-3-2009. Despite this withdrawal, a fresh adjudication order was passed on 31-3-2013, raising questions regarding its legality.

3. The Tribunal observed that there was no explicit provision in the Excise Act, 1944, enabling the withdrawal of an adjudication order. It was argued that the adjudicating authority lacked the power to review its own order. The source of authority that withdrew the earlier order was not clearly identified, raising doubts about the legitimacy of the withdrawal. The Tribunal found the impugned adjudication order prima facie unsustainable due to the absence of lawful authority for its issuance after the withdrawal of the previous order.

4. In light of the above analysis, the Tribunal granted a waiver of pre-deposit and stayed further proceedings for the realization of the adjudicated liability pending the appeals. The respondent was directed to file an affidavit detailing the circumstances leading to the withdrawal of the earlier order and the authority responsible for such withdrawal. The legitimacy of the withdrawal and the source of power for the same were to be clarified through the submission of relevant documents. The appeals were scheduled for regular hearing on 26-3-2014 without the need for fresh notices to be issued.