2017 (5) TMI 30 - AT - Central Excise

Withdrawal of B-1 Bond - non-fulfillment of requirements of Board s Circular No.711/27/2003-CX dated 30.04.2004 and Circular No.284/118/96-CX dated 31.12.1996 - facility to clear the goods without payment of Central Excise duty - Held that - the nature of adverse notice was not spelt out in the SCN. To that extent, the SCN is flawed as it is an accepted principle that full nature of allegation should be informed to the noticee - Since the sole proceeding on which adjudicating authority and Commissioner (Appeals) have relied for withdrawing the B-1 Bond dated 21.04.2006 has been set aside, the order of Commissioner (Appeals) in that background cannot be sustained and the same is set aside - appeal allowed - decided in favor of appellant.

Summary

Issues:
Appeal against Order-in-Appeal No.24/CE/Appl/DLH-IV/2010 dated 16.03.2010 regarding withdrawal of facility to clear goods without payment of Central Excise duty under B-1 Bond dated 21.04.2006.

Detailed Analysis:

1. Withdrawal of Facility based on Adverse Notice:
The appellant, a manufacture-exporter, filed a B-1 Bond for removal of excisable goods without duty payment, claiming exemption from submitting Security/Surety. The department, citing adverse notice and non-compliance with Circulars, asked for surety. A show cause notice was issued without specifying the nature of adverse notice. Adjudication concluded that due to adverse notice on excess unaccounted material, the facility to execute the bond should be withdrawn. Commissioner (Appeals) upheld this decision. The appellant contended that the Circulars were no longer valid and argued applicability. The Adjudicating Authority and Commissioner (Appeals) based their decision on the adverse notice of unaccounted material.

2. Flaw in Show Cause Notice and Previous Proceedings:
The Tribunal found flaws in the show cause notice for not specifying the nature of the adverse notice. Upon examination of previous proceedings, it was revealed that the sole adverse notice relied upon for withdrawing the B-1 Bond had been set aside in a previous appeal to CESTAT. Consequently, the Tribunal set aside the Commissioner (Appeals) order as it was based on the now-invalid adverse notice.

3. Decision and Conclusion:
The Tribunal allowed the appeal by the appellants, as the withdrawal of the facility based on the adverse notice that had been set aside was not justified. The Revenue was given the liberty to initiate fresh proceedings in case of any other subsequent adverse notices. The order of the Commissioner (Appeals) was set aside in light of the invalidity of the adverse notice relied upon for withdrawing the facility.

In conclusion, the Tribunal found that the withdrawal of the facility based on the adverse notice was not valid due to the previous appeal setting aside the sole adverse notice. The appeal was allowed, and the Revenue was permitted to initiate fresh proceedings in case of other valid adverse notices.