2018 (10) TMI 1531 - AT - Central Excise

Principles of natural justice - appellant filed an appeal before the Commissioner (Appeals) contending that they had not been provided with the working paper enclosed with the show cause notice - Violation of Rule 7 of Valuation Rules, 2000, read with Rule 4 of Central Excise Rules, 2002 - Held that - From a perusal of the order dated 15 December, 2008 passed by the Assistant Commissioner, Central Excise, Division-I, Allahabad that there is no statement that a copy of Annexure-A which was said to have been enclosed with the show cause notice was actually served upon appellant. The order merely mentions that despite personal hearing fixed for 14 February, 2008, 21 February, 2008 and 27 February, 2008, the party did not appear and nor did it substantiate its claim by providing any chart. The Commissioner (Appeals) has also not recorded any finding that Annexure-A was supplied to the appellant. The order passed by the Commissioner (Appeals) on 24 September, 2007 requiring the department to supply the working sheet was therefore, not complied with. The impugned orders dated 23 August 2011 and 15 December 2008, therefore, cannot be sustained and deserve to be set aside - appeal allowed.

Issues:
1. Violation of Rule 7 of Valuation Rules, 2000 read with Rule 4 of Central Excise Rules, 2002.
2. Non-provision of "working paper" to the appellant.
3. Breach of principles of natural justice.
4. Compliance with the directions of the Appellate Order dated 24 September, 2007.

Analysis:
1. The appeal arose from an order passed by the Commissioner (Appeals) upholding the demand of Central Excise duty and penalty for the violation of Rule 7 of Valuation Rules, 2000, read with Rule 4 of Central Excise Rules, 2002. The appellant contended that the principles of natural justice were breached as they were not provided with the "working paper" enclosed with the show cause notice.

2. A show cause notice was issued by the Deputy Commissioner Central Excise Division, requiring the appellant to show cause for the demand of Central Excise duty. The appellant, in their appeal, argued that they were not given the "working paper" as mentioned in the notice, leading to a violation of natural justice. The Commissioner (Appeals) allowed the appeal in 2007, remanding the matter to the Original authority for providing a copy of the working sheet.

3. Despite the directions of the Commissioner (Appeals) in 2007, the Assistant Commissioner confirmed the demand of Excise duty and penalty in 2008 without providing the appellant with the necessary documents. The subsequent appeal to the Commissioner (Appeals) in 2011 was dismissed. The Tribunal, upon review, found that the "working paper" was not served to the appellant, and the orders of 2011 and 2008 were not sustainable due to non-compliance with the directions of providing the working sheet.

4. The Tribunal, upon requiring the Department Representative to verify the provision of Annexure-A to the appellant, found that it was not supplied. Consequently, the order of 2008 was set aside, and the appellant was granted six weeks to file a reply to the show cause notice. The Adjudicating authority was directed to decide the matter in accordance with the directions of the Appellate Order dated 2007, ensuring expeditious resolution within three months. The appeal was allowed, setting aside the order of 2008.

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