2018 (7) TMI 1525 - AT - Central Excise

Invocation of extended period of limitation - penalty - inspite of clear directions by this Tribunal for supplying the copies of seized records as requested by the Appellant, the Commissioner did not supply the documents and rather recorded that the Appellant could have very well obtained the necessary documents from their own sources such as their clients - Held that - The non-compliance of the directions in the said remand order is a pre-requisite for de novo adjudication. The department was duty bound to supply the documents to the appellant as per the directions of this Tribunal. But, the Commissioner appears proceeded on premise that it was upto the appellants to produce the documents. From the manner in which the directions have been breached, it would appear that the department is unable to produce the documents. No purpose will be served by a further remand of this old matter. This show cause notice has not made a valid case for invoking of the extended period. Therefore, elements of suppression or misdeclaration cannot be invoked - demand beyond normal period of limitation is set aside - penalties also set aside. Appeal allowed in part.

Summary

Issues: Non-compliance with tribunal directions in supplying seized records, interpretation of remand order, invoking extended period for demand, penalties set aside

In the present case, the appeal was filed against an Order-in-original dated 31.01.2009 passed by the Commissioner of Central Excise, Belapur. The tribunal had earlier allowed the appeal by way of remand in Appeal No. E/451/2009, directing the Commissioner to supply seized records to the appellants and provide a reasonable opportunity of hearing before passing fresh orders. However, the Commissioner failed to comply with these directions and proceeded to interpret the remand order in his own way. The Commissioner contended that the appellants could have obtained the necessary documents from their clients and failed to prove the incorrectness of the demand amount. The tribunal noted the non-compliance with its directions, emphasizing that the department was duty-bound to supply the documents. Consequently, the tribunal set aside the demand exceeding the normal period of limitation and also nullified the penalties imposed, as the show cause notice did not establish a valid case for invoking the extended period or penalties.

The core issue revolved around the non-compliance of the Commissioner with the tribunal's directions regarding the supply of seized records to the appellants. Despite clear instructions for providing the documents, the Commissioner failed to do so and instead shifted the burden onto the appellants to obtain the records from their sources. The tribunal emphasized that the department was obligated to supply the documents as per its directions, and the failure to do so rendered further remand unnecessary. The tribunal found that the department's actions indicated an inability to produce the documents, leading to the setting aside of the demand beyond the normal limitation period and the annulment of penalties.

Another significant issue was the interpretation of the remand order by the Commissioner. The Commissioner's interpretation differed from the clear directions of the tribunal, leading to a misunderstanding of the obligations regarding the supply of seized records. The tribunal highlighted the Commissioner's misinterpretation and reiterated the importance of following the tribunal's directives for a fair and just adjudication process. The tribunal's decision to set aside the demand and penalties was influenced by the Commissioner's erroneous interpretation of the remand order, emphasizing the necessity of adherence to tribunal instructions for a lawful adjudication.

Furthermore, the tribunal addressed the question of invoking the extended period for demand and penalties. The tribunal found that the show cause notice did not present a valid case for invoking the extended period, as elements of suppression or misdeclaration were not established. Consequently, the tribunal set aside the demand beyond the normal limitation period and also nullified the penalties imposed, emphasizing the lack of sufficient grounds for invoking the extended period or penalties in the case at hand.