2018 (9) TMI 1130 - AT - Central Excise

Recovery of Fraudulent availment of Cenvat credit - Principles of natural justice - Held that - From the sequence of events, it is evident that the adjudicating authority did not follow the principles of natural justice. The appellant were not given a chance to effectively defend their case by not providing the relied upon statements and the matter was adjudicated ex-parte even as the appellant were making repeated pleas for copies of four statements relied in the show cause notice to be given to them. This plea of the appellant was not dealt by the Commissioner (Appeals), while deciding their appeal. The matter is remanded back to the adjudicating authority with the direction that the copies of relied upon statements which have been repeatedly requested by the appellant should first be provided to the appellant and thereafter the matter should be adjudicated afresh by giving a fair opportunity to appellant to defend their case - appeal allowed by way of remand.

Issues:
- Non-provision of relied-upon statements in show cause notice
- Violation of principles of natural justice
- Adjudication conducted ex-parte
- Failure to provide fair opportunity for defense

Analysis:
1. Non-provision of relied-upon statements in show cause notice:
The case revolves around the appellant being issued a show cause notice alleging fraudulent availment of Cenvat credit without providing copies of statements of key individuals mentioned in the notice. The appellant repeatedly requested these statements but was only provided with other documents not specifically requested. The Tribunal observed that the show cause notice did not mention the relied-upon documents, and despite the appellant's efforts to obtain them, the adjudicating authority proceeded ex-parte without providing the necessary statements. The failure to supply the relied-upon statements deprived the appellant of a fair chance to defend their case, leading to a violation of natural justice principles.

2. Violation of principles of natural justice:
The Tribunal found that the adjudicating authority did not adhere to the principles of natural justice by not providing the appellant with the statements crucial to their defense. Despite the appellant's repeated requests and reminders, the authority proceeded with the adjudication, ultimately resulting in an ex-parte decision against the appellant. This lack of procedural fairness and denial of access to relied-upon statements constituted a clear violation of the principles of natural justice, undermining the appellant's right to a fair hearing.

3. Adjudication conducted ex-parte:
Due to the non-supply of relied-upon statements and the adjudication proceeding ex-parte, the Tribunal determined that the appellant was not afforded a meaningful opportunity to present their case and respond to the allegations. The failure to provide the necessary documents rendered the adjudication one-sided and prejudicial to the appellant's interests. As a result, the ex-parte adjudication was deemed unjust and unsustainable, highlighting the importance of procedural fairness and the right to be heard in legal proceedings.

4. Failure to provide fair opportunity for defense:
The Tribunal concluded that the appellant's right to a fair opportunity to defend their case was compromised due to the adjudicating authority's actions. By not supplying the relied-upon statements and proceeding with the adjudication ex-parte, the authority failed to ensure a fair and impartial process for the appellant. The Tribunal set aside the impugned order and remanded the matter back to the adjudicating authority with a directive to provide the appellant with the necessary statements before conducting a fresh adjudication, emphasizing the importance of upholding the principles of natural justice and granting a fair chance for defense in legal proceedings.

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