2020 (10) TMI 156 - AT - Central Excise

Imposition of penalties u/r 26(2)(i) and Rule 26(2)(ii) of Central Excise Rules, 2002 - allegation that the appellant have issued invoices to M/s. Chandra Protecto Limited, Silvassa for supply of Copper Conductors, Copper Rods and Copper Wires whereas only invoices were issued without supplying the physical materials - HELD THAT - It is a claim of the appellants that they have produced various documents and submissions however, the Adjudicating Authority has not properly dealt with the documents and submissions made by the appellants. Therefore, there is a violation of principles of natural justice. Irrespective of any grave nature of offence, if the principles of natural justice are not followed, the order will not sustain - matter remanded to the Adjudicating Authority for passing a fresh order after considering all the documents and submissions thereon made by the appellants - appeal allowed by way of remand.

Summary

Issues:
Waiver of penalties under Rule 26(2)(i) and Rule 26(2)(ii) of Central Excise Rules, 2002 based on allegations of issuing invoices without supplying physical materials.

Analysis:
The appeals were filed seeking the waiver of penalties imposed on M/s. Rupam Conductors Pvt. Limited and Mrs. Manisha H. Mehta for alleged issuance of invoices without actual supply of Copper Conductors, Copper Rods, and Copper Wires to M/s. Chandra Protecto Limited, Silvassa. The penalties of ?50 Lakh and ?5 Lakh were imposed under Rule 26(2)(i) and Rule 26(2)(ii) of the Central Excise Rules, 2002, respectively.

During the hearing, the appellant's counsel highlighted various shortcomings in the impugned order. It was argued that the appellant had provided material inward and outward records demonstrating receipt and supply of goods. Additionally, documents such as purchase orders, production sheets, invoices, challans, and inward-outward registers were produced to show physical supply of goods. It was pointed out that out of 34 supplies made between January 2012 to March 2012, the show cause notice did not apply to 30 invoices as per the record. The counsel contended that all relevant documents and submissions were presented before the Adjudicating Authority, which, however, failed to properly address them, leading to a violation of principles of natural justice.

The Tribunal noted the appellant's claim that despite submitting various documents and making submissions, the Adjudicating Authority did not adequately consider the evidence presented. Emphasizing the importance of adhering to principles of natural justice, the Tribunal held that failure to do so could render an order unsustainable, regardless of the gravity of the offense. Consequently, the impugned orders were set aside, and the matter was remanded to the Adjudicating Authority for a fresh decision, instructing to consider all documents and submissions made by the appellants. The appeals were allowed by way of remand to ensure a fair and thorough review of the case.

This judgment underscores the significance of upholding principles of natural justice in administrative proceedings, highlighting the need for authorities to duly consider all evidence and submissions presented by parties involved. The decision serves as a reminder that procedural fairness is essential in maintaining the integrity and validity of legal orders, even in cases involving alleged regulatory violations.