2007 (12) TMI 72 - AT - Central Excise

Commissioner did not deal with the contentions of the Appellant at all in the order - Natural justice demands that decision should be based on evidence of probative value - Neither the Appellate Authority below could dispose the matter by a speaking and reasoned order nor also could examine various facts governing the issue in question - Order of comm..(A) of confirming duty is set aside - section 11A of Central Excise Act, 1944 was not invocable as there is no suppression appeal allowed

Summary

Issues involved:
1. Appeal against duty demand, penalty, and interest under Central Excise Act, 1944.
2. Abatement of duty due to shortfall in production and factory closure.
3. Duty liability under Rule 96ZP(4) of Central Excise Rules, 1944.
4. Barred by limitation under section 11A of the Central Excise Act, 1944.
5. Failure of Authorities to dispose of Appellant's application promptly.
6. Applicability of duty, penalty, and interest in case of no production.
7. Natural justice and due process in decision-making.
8. Public confidence in public servants and grievance redressal.

Analysis:
1. The Appellant appealed against an order confirming duty demand, penalty, and interest under the Central Excise Act, 1944. The Learned Commissioner (Appeal) upheld the duty demand but did not rule on penalty and interest. The Appellant's factory producing non-alloy steel closed permanently, leading to duty liability issues under Rule 96ZP(4) of Central Excise Rules, 1944.

2. The Appellant contended that the duty demand was barred by limitation as they had informed the Department about factory closure, supported by electricity bills showing no operation. The Authorities' delay in responding to the closure notification caused undue hardship. The Appellant argued that no duty was payable due to the factory closure and market conditions, emphasizing the non-production period.

3. The Revenue argued that the Appellant evaded duty liability, justifying the Authorities' actions. However, the Appellate Tribunal found that the Authorities failed to address the Appellant's contentions adequately, violating principles of natural justice and due process. The failure to dispose of the Appellant's grievances promptly led to the setting aside of the impugned order.

4. The Tribunal highlighted the importance of public confidence in public servants and the need for timely grievance redressal. The failure to act on the Appellant's notifications and requests for relief from duty liability demonstrated a lack of procedural fairness. Consequently, the Appeal succeeded, and the impugned order was set aside, emphasizing the necessity of a fair and timely decision-making process in such matters.