2015 (9) TMI 1265 - AT - Central Excise

Waiver of pre-deposit of duty - clandestine removal of the manufactured goods - Penalty under section 11AC - Held that - The defense of the appellant for not filing the reply and attend the personal hearing is that all relevant documents were not supplied to them. However, before this Tribunal, the ld. Advocate could not able to explain which documents were relevant, but not supplied to them. - justice cannot be achieved by not affording an opportunity to the Appellant to rebut the allegation leveled against them, we are of the view that the matter be remitted to the adjudicating Commissioner for deciding the issues afresh after affording an opportunity of hearing to the appellant and allow them to file reply to the show cause notice, in support of their defense. However, it is necessary to put some conditions on the appellants before remanding the case to the adjudicating authority. Consequently, the Appellant No. 1 M/s. Sidhi Vinayak Metcom (P) Ltd. is directed to deposit seven and half per cent of the confirmed duty within a period of eight weeks from the date of communication of the order and report compliance directly to the ld. Commissioner. After recording compliance, the ld. Commissioner would proceed with the adjudication, to decide all the issues afresh. He is also directed to consider the request for providing the relevant documents, if the list of such documents necessary for the defense are submitted to the department and these are in possession of the department - Matter remanded back - Decided in favour of assessee.

Summary

Issues:
Waiver of pre-deposit of duty, penalty under section 11AC, personal penalty under Rule 26 of Central Excise Rules, alleged clandestine manufacture and removal of goods, adequacy of opportunity to present defense, remand to adjudicating authority.

Waiver of Pre-Deposit of Duty and Penalties:
The appellant sought waiver of pre-deposit of duty amounting to Rs. 1.65 Crores, penalty under section 11AC, and personal penalty of Rs. 50.00 Lakhs. The appellant's representative argued that the demand was based on allegations of clandestine manufacture and removal of sponge iron, but they were not provided with all relevant documents to prepare a proper response. The appellant offered to deposit seven and a half per cent of the confirmed duty and requested a fair chance to present their case. The Revenue, however, supported the findings of the Commissioner, stating that the appellant failed to respond to the show cause notice or attend the personal hearing. Despite the Revenue's objection, the Tribunal decided to dispose of the appeals at that stage with the consent of both parties.

Alleged Clandestine Removal of Goods:
The Tribunal observed that the case involved the alleged clandestine removal of sponge iron without payment of duty. The adjudicating authority had relied on various evidences, including data from portable hard discs, Pendrive, and other documents like sale and purchase ledger, weighment slips, and registers, to confirm the allegations. The appellant contended that they were not given the opportunity to rebut the evidences as they were not provided with all relevant documents. The Tribunal noted that the appellant had repeatedly requested extensions to file a reply and participate in the proceedings, claiming that essential documents were not supplied. However, the Tribunal found that the appellant's representative could not specify which documents were crucial but not provided. Emphasizing the importance of affording the appellant a fair opportunity to defend themselves, the Tribunal remanded the case to the adjudicating authority for a fresh decision after allowing the appellant to submit a reply and present their defense.

Adequacy of Opportunity to Present Defense:
The Tribunal highlighted that justice required providing the appellant with a chance to rebut the allegations against them. Therefore, they directed the appellant to deposit seven and a half per cent of the confirmed duty within eight weeks and report compliance to the Commissioner. The adjudicating authority was instructed to consider any requests for relevant documents necessary for the defense if submitted by the appellant. The Commissioner was further directed to grant a reasonable opportunity for a hearing and to decide all issues afresh. The Tribunal kept all issues open, allowed the appeals by way of remand, and disposed of the Stay Petitions.

In conclusion, the Tribunal acknowledged the seriousness of the allegations of clandestine removal of goods but emphasized the importance of providing the appellant with a fair opportunity to present their defense. The decision to remand the case to the adjudicating authority was based on the principle of ensuring justice by allowing the appellant to rebut the evidences against them and participate in the adjudication process.