2015 (11) TMI 955 - HC - Central Excise

Validity of ex-parte order passed by the tribunal - Violation of principle of natural justice - Held that - Show-cause notice was issued by the Respondent Department in the month of August, 2014 and reply to that show-cause was given on 13th October, 2014, in which it was specifically stated that the petitioners have received the notice for hearing dated 20th October, 2014 and it was requested that the matter be adjourned to some other date after 14th November, 2014. Thereafter, vide notice dated 21st October, 2014 respondent fixed hearing of the adjudication on 11th November, 2014. On the said date, counsel for the petitioner presented himself in the office of the respondent, but, the Commissioner of Central Excise, Jamshedpur was not available and therefore, this petitioner gave application praying therein that since the Commissioner is not available, the next date of hearing may be fixed in the month of December, 2014. Surprisingly, instead of the next date of hearing being fixed, the petitioner was served with an ex-parte order dated 9th February, 2015 passed without giving any adequate opportunity of being heard to the petitioner - Impugned order is set aside - Matter remanded back - Decided in favour of assessee.

Summary

Issues:
Challenge to ex-parte order imposing central excise duty and penalty without adequate opportunity of hearing.

Analysis:
The writ application challenged an ex-parte order by the Commissioner of Central Excise imposing central excise duty and penalty totaling &8377; 5,77,77,420 without providing adequate opportunity for hearing. The petitioner argued that they were not given a fair chance to present their case as the order was passed without proper hearing. The petitioner had requested adjournments due to unavailability of the Commissioner on the scheduled hearing dates, but the order was passed regardless. The petitioner sought the quashing of the order and a fresh decision based on merit and evidence without influence from the previous order.

The respondent contended that the petitioner had been given multiple opportunities for hearings, but the petitioner allegedly avoided them and adopted delaying tactics during the adjudication process. The respondent argued that the order was passed after considering the petitioner's history of seeking adjournments and delaying the proceedings. The respondent opposed the petitioner's request for a fresh decision, claiming that adequate opportunities had already been provided.

The court, after hearing arguments from both sides, quashed the impugned order dated 9th February, 2015, passed by the Commissioner of Central Excise. The court found two key reasons for setting aside the order. Firstly, the order was passed ex-parte when the Commissioner was unavailable for a scheduled hearing, which should have led to the fixing of the next hearing date instead of an immediate decision. Secondly, the complexity of the issues involved required a thorough consideration with the assistance of the petitioner. The court emphasized that decisions involving substantial amounts like the central excise duty and penalty should not be made ex-parte, especially when based on technical calculations like electricity consumption. The court remanded the matter back to the Commissioner for a fresh decision, directing the petitioner to be present on a specified date without seeking unnecessary adjournments. The Commissioner was instructed to decide the matter based on evidence and without influence from the previous order.