2018 (10) TMI 18 - AT - Central Excise

Clandestine removal - lower authorities have concluded the demand on the basis that of the confessional statements - Principles of Natural Justice - Held that - Without availability of relied upon documents, the demand can be confirmed on the basis of these statements - the basic document from which the data was collected for confirming the demand are must. The statements alone in absence of said documents will not suffice for confirmation of demand. This is a settled law that when the departments relied upon document on the basis of which demand is raised, without such documents made available to the assessee, no proceeding can be concluded. Principles of Natural Justice - Held that - Confirmation of demand without providing the relied upon documents is in gross violation of principles of natural justice. Observance of the principles of natural justice is foremost requirement in any of the judicial proceeding, irrespective of any grave nature of the case, therefore, the demand, without making available the relied upon documents to the appellant, cannot sustain. Appeal allowed - decided in favor of appellant.

Summary

Issues: Alleged clandestine removal of finished goods, demand of duty, penalty imposition, confiscation of assets, appeal against orders

Alleged Clandestine Removal of Finished Goods:
The case involved the appellant, engaged in manufacturing Copper rods and Strips, facing allegations of clandestine removal of finished goods. Specific information led to a visit by Central Excise officers, resulting in the recovery of various records and statements. A Show Cause Notice was issued, followed by adjudication confirming a duty demand of ?13,08,692. Subsequent appeals and orders remanded the matter regarding the provision of relied upon documents.

Demand of Duty and Penalty Imposition:
The initial duty demand was confirmed at ?1,05,404 with a penalty under Section 11AC. Further appeals led to modifications in the redemption fine and penalties imposed on individuals associated with the company. The Tribunal enhanced the penalty from ?26,531 to ?30,404 based on the Revenue's appeal.

Confiscation of Assets:
Penalties under various rules were imposed, including confiscation of Land, Building, plant, and Machinery, along with redemption fines. The Commissioner's orders and subsequent appeals addressed the imposition and reduction of these penalties.

Appeal Against Orders:
Multiple appeals were filed against various orders, contesting duty demands, penalties, and confiscation decisions. The Tribunal's final decision on the appeal against the impugned order dated 11.09.2007 set aside the order and allowed the appeals based on the non-provision of relied upon documents, emphasizing the violation of principles of natural justice.

The Tribunal's Judgment, delivered by Mr. Ramesh Nair, Member (Judicial), on 28.09.2018, focused on the critical issue of the non-provision of relied upon documents essential for confirming the demand. The Tribunal emphasized the necessity of such documents for fair adjudication, citing legal precedents supporting the requirement for providing relied upon documents to the appellant. The judgment highlighted the violation of principles of natural justice due to the absence of these documents, leading to the setting aside of the impugned order and allowing the appeals. The detailed analysis considered the legal position on relied upon documents, underscoring the importance of procedural fairness in judicial proceedings.