2016 (6) TMI 997 - HC - Central Excise

Revocation of the registration of Central Excise - detection of fraud - opportunity of hearing was not given to the assessee before passing the order of revocation of common registration. - Held that - while the earlier writ petition was filed by the assessee, it was without taking remedy before the Commissioner (Appeals). The appeal was thus filed and, finding an order of revocation dated 27.11.2013 to be in violation of principles of natural justice, it was interfered by the Commissioner (Appeals). The order of the Commissioner (Appeals) has been upheld by the Tribunal. A right was accrued with registration in favour of the assessee. If common registration was to be revoked, nobody prevented the revenue to pass proper order by giving an opportunity of hearing to the assessee. The revenue cannot pass unilateral order without hearing other party. It is more so when allegations have been made for playing fraud on the department. - Revenue appeal dismissed. - Decided against the revenue.

Summary

Issues: Challenge to revocation of common registration for excise; Principles of natural justice; Fraud committed by the assessee

Challenge to revocation of common registration for excise:
The appeal challenged the order revoking the registration of a new unit sought by the assessee, who had earlier been granted registration for two other units. The Commissioner (Appeals) allowed the appeal, setting aside the revocation order, which was dismissed by the Tribunal. The Tribunal refused to interfere, citing lack of opportunity for the assessee to be heard before revocation. However, it was noted that the assessee had been called for a hearing before the revocation letter was issued. The court considered the fraud committed by the assessee and the fact that the assessee was not entitled to common registration for a particular entity. The court held that the revocation order was without following principles of natural justice and not in line with the grounds of revocation.

Principles of natural justice:
The court emphasized the importance of following principles of natural justice in revocation proceedings. It was highlighted that the revocation of common registration should have been done after giving the assessee an opportunity to be heard. The court noted that the revenue cannot pass unilateral orders without hearing the other party, especially when fraud allegations are involved. The court upheld the orders of the Commissioner (Appeals) and the Tribunal, emphasizing the need for proper procedure and adherence to natural justice principles in such matters.

Fraud committed by the assessee:
The court acknowledged the fraud committed by the assessee in seeking registration for a new unit while already having registration for other units. The court considered this fraud in the context of the revocation of common registration and emphasized that the revenue should take action following principles of natural justice and in accordance with the law. The court dismissed the appeal, allowing the revenue to take further action in the matter but only after ensuring due process and adherence to legal provisions.

Overall, the court upheld the decision of the Commissioner (Appeals) and the Tribunal, emphasizing the importance of natural justice principles, proper procedure, and lawful actions in matters concerning the revocation of registration and allegations of fraud.