2016 (10) TMI 306 - HC - Central Excise

Evasion of excise duty - Validity of adjudication order - violation of principles of natural justice - documents which have been relied upon by the department in the adjudicating process were not made available to the petitioner despite requests thereof being made - adjudicating authority has placed reliance on the evidence of the co-accused who is an accomplice - deponent was not allowed to be cross-examined - Held that - the forensic report is discussed in the writ petition. It relates to forgery of invoices. The department had referred to the copies of the official invoices and copies of the forged invoices to the Government Examiner of Questioned Documents, Directorate of Forensic Sciences, Ministry of Home Affairs for their opinion and report. The report is available to the petitioner, at least after the impugned order. Nothing has been placed on record to suggest that the report of the forensic expert is wrong. In the present case it is not merely the forensic report but the conspectus of the facts and the documents that were taken into consideration by the adjudicating authority. Period of limitation - Held that - the impugned order finds that, the petitioner is guilty of suppressing documents during investigation and evasion of payment of appropriate duty on excisable goods. Nothing in Section 11A of the Central Excise Act permits the Court to come to a different finding, in conspectus of the facts of the present case, that the claim of the department is barred under Section 11A. The impugned order narrates as to how the petitioner had gone about their business of concealing and suppressing the transactions from the department. It was discovered at a later stage. The mechanism by the petitioner for concealment and evasion used was so well-organised that it had evaded the notice of the personnel posted at the factory premises of the petitioner. Therefore the mere fact that the personnel of the Excise was officially posted in the factory premises and that there is no allegation of omission ipso facto does not absolve the petitioner from a charge of evasion of duty. - Decided against the petitioner

Summary

Issues:
Challenge to order of adjudication of Central Excise on grounds of violation of principles of natural justice.

Analysis:
The petitioner challenged the order of adjudication of Central Excise dated January 29, 2008, alleging a violation of the principles of natural justice. The petitioner contended that copies of documents relied upon in the adjudication process were not provided despite requests. The petitioner also raised concerns regarding the reliance on evidence of co-accused without the opportunity for cross-examination. The forensic report was discussed in the impugned order, and the petitioner claimed they were not made aware of this report or given a chance to cross-examine the forensic expert.

The petitioner referred to Section 11A of the Central Excise Act, arguing that the claim made by the department in the show cause notice was barred under its provisions. The petitioner further argued that the presence of Excise department personnel at their factory did not imply collusion or evasion of excise duty, as alleged by the department. However, the department defended the impugned order, asserting its correctness and opposing any interference.

The Court noted that the impugned order was appealable under Section 35B of the Central Excise Act, and despite the availability of a statutory appeal, the petitioner opted for a writ petition. The Court emphasized that a Writ Court is not an appellate authority and has limited scope in reviewing decisions when a statutory appeal is available. The Court highlighted that a writ is maintainable in cases of violation of natural justice, lack of jurisdiction, perversity in the order, or challenge to the Act's vires.

Regarding the alleged violation of natural justice, the Court analyzed the petitioner's contentions. It was found that the department had responded to the petitioner's requests for documents, indicating some were unavailable and identifying their location. The Court concluded that the petitioner did not take necessary steps to obtain these documents from third parties, undermining the claim of a breach of natural justice. Additionally, the reliance on co-accused evidence and the forensic report were justified based on the facts and evidence considered by the adjudicating authority.

Ultimately, the Court dismissed the writ petition, finding no merit in the petitioner's arguments. The plea of limitation was also rejected, and the interim order was vacated. The request for a stay of the order was considered and refused.