2018 (1) TMI 736 - AT - Central Excise

Restoration of appeal - appeals filed were dismissed for non-prosecution on 20.02.2017 - principles of Natural Justice - clandestine manufacture and removal - Held that - It is the case of the appellant in the grounds of appeal that the adjudicating authority as called for report from the Assistant Commissioner s Office after personal hearing was over on 27.10.2009 and without giving a copy of the said letter to them has adjudicated the proceedings which is in violation of principles of natural justice. In my considered view, the claim of the appellants is correct. The adjudicating authority has specifically in paragraph 11.4 recorded that loss of the diary being a factual position cannot be given to the assessee at the sage of adjudication but proceed ahead to decide the matter and demand a duty of ₹ 23,40,811/- based on octroi receipts colleted from the octroi authorities on receipt of raw materials - the various plea put in by the appellants before the authorities that such demand based upon only raw material receipt is incorrect and needs to be corroborated further. Appeal allowed by way of remand.

Summary

Issues:
Appeal against order-in-original dated 26.02.2010 - Non-appearance of appellants - Restoration of appeal - Violation of principles of natural justice - Duty confirmation based on octroi receipts - Supply of diary for defense - Remand to adjudicating authority.

Analysis:
The judgment pertains to two appeals challenging order-in-original No.OIO-02-BRC-I-MP-2010 dated 26.02.2010. Initially, the appellants did not appear, citing a hearing before the Commercial Court as a reason for adjournment, which was rejected due to previous non-prosecution. Despite restoration of the appeals, the appellants failed to appear before the Bench, leading to a hearing in their absence.

In the first round of litigation, the Tribunal had remanded the matter to the adjudicating authority to reconsider the issue afresh following the principle of natural justice. However, in the impugned order, the demands were confirmed without proper consideration of the appellants' submissions and requests for relevant documents.

The appellants had raised concerns regarding discrepancies and shortages, submitting representations and seeking specific documents for their defense. The adjudicating authority's reliance on certain letters without providing copies to the appellants was deemed a violation of natural justice principles. The Tribunal emphasized the importance of providing necessary documents for the defense and directed the adjudicating authority to reconsider the issue and supply the diary to the appellants for their defense.

Regarding the duty confirmation based on octroi receipts, the Tribunal found that the adjudicating authority had not adequately addressed the appellants' submissions and had failed to consider the necessity of corroborating the demands further. The judgment highlighted the need for a thorough reconsideration of the case by the adjudicating authority, emphasizing the importance of following principles of natural justice in the process.

In conclusion, the impugned order was set aside, and the appeals were remanded to the adjudicating authority for a fresh consideration following the principles of natural justice. The judgment aimed to ensure a fair and comprehensive review of the issues raised by the appellants, emphasizing the importance of providing necessary documents and considering all relevant submissions in the adjudication process.