2007 (4) TMI 184 - HC - Central Excise

Biased approach by revenue - matter clearly shows reasonable likelihood of bias - prosecutor himself should not be a judge - judge should be a neutral & disinterested person - actual existence of bias is not necessary - filing four affidavits strongly opposing grant of rebate claims & his insistence to hear the above matter, clearly establishes the real likelihood of bias OIO dated 3rd April,2007 rejecting the rebate claim is actuated with malice and the same cannot be sustained in law

Summary

Issues:
Challenge to Order-in-Original rejecting rebate claims.

Analysis:
The petitioner challenged the Order-in-Original rejecting rebate claims for excise duty paid on goods exported. The petitioner, a company manufacturing "Mentha Oil," claimed rebate based on exports by another company. The Assistant Commissioner had previously granted rebates based on a disclaimer letter. The petitioner contended that it exported goods and was entitled to rebate under Rule 18 of the Central Excise Rules, 2002. The petitioner filed a Writ Petition seeking relief for rebate claims totaling Rs. 17,15,49,141. The court permitted withdrawal of the petition with an assurance that refund claims would be decided within six weeks. Subsequently, a show cause notice was issued, and the petitioner raised concerns about bias. Despite objections, the Respondent passed the Order-in-Original rejecting all rebate claims.

The petitioner alleged bias and malice on the part of the Respondent in passing the order hastily. The Respondent's actions, including filing opposing affidavits and refusing to grant time for arguments, raised concerns about impartiality. The petitioner's counsel argued that the order was mala fide and unsustainable. The Respondent's actions were seen as prejudiced, leading to doubts about a fair hearing. The Respondent's insistence on proceeding with the matter despite objections indicated a reasonable likelihood of bias. The court emphasized the importance of a fair adjudicatory process to maintain public confidence.

The court cited legal principles regarding bias, emphasizing the need for a neutral and disinterested adjudicator. The test for bias is the real likelihood of bias, not the actual existence. The court referenced a Supreme Court case highlighting the importance of impartiality in judicial proceedings. Scholarly opinions were also cited to support the view that a reasonable person should perceive a substantial possibility of bias. In this case, the Respondent's actions, including increasing the demand without allowing the petitioner to respond, were deemed indicative of bias and malice.

The court found the Respondent's actions to be actuated with malice and unsustainable in law. The court ruled in favor of the petitioner, directing a different officer to adjudicate the show cause notice afresh to ensure a fair hearing. The decision highlighted the importance of unbiased adjudication and the need for a transparent and impartial process in administrative proceedings.