2016 (8) TMI 749 - AT - Central Excise

Modvat credit - inputs used in the manufacture of their finished goods - no documents were supplied to the Appellant as directed by this Bench - Revenue contended that relied upon documents were given to the Appellant along with the show cause notice, therefore, no need of supplying the same to the Appellant again - Held that - if Order dated 10.07.1998 passed by this Bench was not acceptable to the Revenue then the same could have been appealed against. Adjudicating authority was not correct in making his observations in Order-in-Original dated 30.12.2013, after more than fifteen years of the Order dated 10.07.1998 passed by this Bench, that the relied upon documents need not be provided again to the Appellant in spite of specific order passed by this Bench. Therefore, in the absence of supply of the documents, appeal filed by the Appellant is required to be allowed for not complying with the Order dated 10.07.1998 and for not fulfilling the principles of natural justice. - Decided in favour of appellant

Summary

Issues involved:
1. Disallowance of Modvat Credit on various inputs used by the Appellant.
2. Non-supply of relied upon documents to the Appellant.
3. Invocation of the extended period for demand.
4. Compliance with the principles of natural justice.

Detailed Analysis:
1. The Appellant filed an appeal against an Order confirming a demand of ?24,48,179.45 and imposing a penalty of ?3,00,000 under the Central Excise Rules. The issue revolved around the disallowance of Modvat Credit on inputs used in manufacturing finished goods due to procedural lapses. The Consultant for the Appellant argued that the demand was primarily raised for not meeting procedural requirements.

2. The Consultant highlighted that this was the second round of litigation, with the matter previously remanded to the Adjudicating authority for non-compliance with directions. The Appellant had not received the relied upon documents as directed earlier, leading to a lack of procedural fairness. The Consultant contended that the extended period for demand was not applicable as all relevant documents had been provided to the department.

3. On the Revenue's side, it was argued that all relied upon documents were indeed given to the Appellant along with the show cause notice, citing a relevant case law. However, the Adjudicating authority's observations contradicted the earlier directions given by the Bench, leading to a lack of procedural regularity.

4. After hearing both sides and reviewing the case records, the Bench noted discrepancies in the supply of documents and the Adjudicating authority's failure to adhere to previous directives. The Bench emphasized the importance of complying with principles of natural justice and ensuring procedural fairness. Due to the non-supply of documents and the violation of earlier orders, the Appeal was allowed based on the failure to meet the standards of natural justice, without delving into other aspects like the time bar and merits of the case.

In conclusion, the Appeal was allowed due to the non-compliance with earlier directives and the principles of natural justice, highlighting the significance of procedural regularity in legal proceedings.