2015 (1) TMI 25 - AT - Central Excise

Waiver of the pre-deposit - ineligible Cenvat credit availed - Violation of principle of natural justice - Held that - adjudicating authority has not indicated anything about adjournment request received from the appellant nor there is any mention of subsequent personal hearings being granted. In our view, the adjudicating authority having passed an order on 14-2-2013, could have definitely granted another personal hearing to appellant, before coming to any conclusion on the role authorized to the appellant. In our view, there seems to be violation of natural justice. At the same time, we have also find that the appellants attitude for not co-operating with the adjudicating authority, as well as non-appearance before the Tribunal seems to be delinquent in as much as, when the matter was first called and the stay petition was disposed of, due to non-appearance. Be that as it may, we find that since there is a violation of principles of natural justice, the matter needs reconsideration by the adjudicating authority. - Matter remanded back conditionally - Decided partly in favour of assessee.

Summary

Issues: Stay petitions for waiver of pre-deposit of ineligible Cenvat credit, interest, and penalties imposed. Violation of natural justice due to lack of effective personal hearing.

In this judgment by the Appellate Tribunal CESTAT AHMEDABAD, the stay petitions were filed seeking the waiver of the pre-deposit of an amount confirmed as ineligible Cenvat credit availed, interest, and penalties imposed. The adjudicating authority found that the main appellant had availed Cenvat credit on grey fabrics without actually receiving them, leading to a rebate claim by the merchant exporters. The appellant's counsel argued that only one hearing was granted, and despite seeking an adjournment, the Order-in-Original was passed without granting the adjournment, causing a violation of natural justice. The counsel referred to a previous case where it was held that both demanding reversal of Cenvat credit and rebate claim simultaneously was not permissible. The financial hardships faced by the appellant were also highlighted.

The Departmental Representative countered by pointing out the director's admission that inputs were not received, and credit was availed based solely on invoices. After hearing both sides, the Tribunal observed a violation of natural justice as the appellant was not granted an effective personal hearing. The Tribunal noted that the appellant had requested an adjournment, which was acknowledged, but the adjudicating authority did not mention this in the order. The Tribunal found the appellant's non-cooperation with the adjudicating authority and non-appearance before the Tribunal concerning. Despite this, due to the violation of natural justice, the matter was directed to be reconsidered by the adjudicating authority. The appellant was directed to deposit a specified amount to ensure participation in the proceedings and cooperation with the adjudicating authority for reconsideration of the issue on merits following the principles of natural justice. The appeals were disposed of accordingly.