2019 (4) TMI 723 - AT - Central Excise

Valuation - annual capacity production - closed stenters to be included or not - abatement for the closure period - the adjudicating authority has confirmed the demand taking into account the closed non-working stenter and also without allowing abatement for the closure period of the said stenters solely on the ground that formal application seeking abatement has not been filed by the appellant - Held that - The adjudicating authority has confirmed the demand and imposed penalty without affording an opportunity of hearing to the appellant. In these circumstances, it is prudent to remand the matter to the adjudicating authority to pass an appropriate order taking into consideration, the CBEC Circular dated 15/09/1999 and after affording a reasonable opportunity of hearing to the appellant - appeal allowed by way of remand.

Summary

Issues:
- Appeal against the order passed by the Commissioner of Central Excise (Appeals), Mumbai regarding duty discharge on stenters under HASITPAD Rules, 1998.
- Allegation of violation of principles of natural justice by the adjudicating authority.
- Interpretation of Circular No. 485/51/99-CE dated 15/09/1999 regarding abatement for closure period of stenters.
- Adjudication without allowing abatement and imposing penalty without a hearing.

Analysis:

The appeal in question was filed against the order passed by the Commissioner of Central Excise (Appeals), Mumbai, relating to the duty discharge on stenters under HASITPAD Rules, 1998. The appellants, engaged in manufacturing fabrics falling under specific chapters, contended that one of their stenters was under repair during the relevant period, and they were entitled to abatement for the closure period. However, the demands were confirmed without considering this plea, leading to the allegation of violation of principles of natural justice by the adjudicating authority.

The appellant's advocate argued that as per Circular No. 485/51/99-CE dated 15/09/1999, the adjudicating authority was obligated to consider abatement for the closure period without requiring a formal application. On the other hand, the Revenue's representative supported the findings of the Commissioner (Appeals), leading to a detailed consideration of the submissions from both sides.

Upon careful review, the Tribunal observed that the adjudicating authority had confirmed the demands without allowing abatement for the closed stenter and had imposed penalties without providing the appellant with a hearing opportunity. It was noted that the authority's decision was based on the absence of a formal abatement application, disregarding the circumstances of the closed stenter and the principles of natural justice.

In light of these observations, the Tribunal decided to remand the matter to the adjudicating authority for a fresh decision. The authority was directed to consider the Circular dated 15/09/1999, allow a reasonable opportunity for the appellant to be heard, and make a decision taking into account all relevant factors. The appeal was allowed by way of remand, keeping all issues open for further consideration, ensuring a fair and just adjudication process.