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2021 (1) TMI 752 - AT - Central ExciseViolation of principles of Natural Justice - Clandestine removal - relied upon documents were not supplied within 30 days in violation of Rule 24A of Central Excise Rules, 2002 - whether the impugned order needs to be set aside on the premise that there has been gross violation of the principles of natural justice or if such violations or defects in the impugned order are curable?. Violation of principles of Natural Justice or not - HELD THAT - The very fact that personal hearing was fixed 4 times, in a span of about 2 months, even when the adjudicating authority was aware that the appellants did not receive all the documents, is itself a proof that principles of natural justice were not followed - A huge case of evasion of 64 Cr by 4-5 units, involving a number of searches, number of statements recorded and humungous number of documents recovered definitely calls for a more careful and responsible handling by the department in adhering to rules instructions and provisions of law. It is very easy to brush aside the claims of the appellant as delaying tactics. Understandably, the charged appellants would see their interest in getting things delayed. However, department should have taken commensurate steps so that the appellants could not raise such a claim in the first instance. Understandably, replying to such a big case takes some time after receiving the records and to this extent the appellants are within their rights. We find that the revenue erred seriously in sleeping over one year, in rushing through the motions thereafter through a period of mere 2-3 months, in fixing personal hearing on 4 dates while correspondence for handing over documents is going on etc. Consequentially, the fact remains that the appellants were not provided with the RUDs/ Non-RUDs completely or in even time; the appellants were denied a right that was available to them as per Rule 24A of Central Excise Rules, 2002 and CBEC instructions contained in Circular No. 171/5/96-CX.6 dated 02/02/1996, Instruction No. 207/09 /2006-CX.6 and Circular No. 42/88-CX.6 dated 24/05/1988. Therefore, we find that they were not given opportunity to represent themselves - thus, this is a clear case of not following principles of natural justice. Whether the impugned order needs to be set aside on the premise that there has been gross violation of the principles of natural justice or if such violations or defects in the impugned order are curable? - HELD THAT - It is found that while the learned counsel for the appellants requests for setting aside the order and allowing the appeals; learned Authorised Representative, while not accepting that there has been any such violation, submits that in case the bench finds that the principles of natural justice have been violated, the next course would be remand of case to the authorities. It is found that even in the cases relied upon by the appellants, the appeals were allowed only by way of Remand. We find, as per our discussion above, that the department did not properly adhere to the procedures in a case involving alleged evasion of 64 Cr of duty; the proceedings were rushed through after lying low for about a year of issuance of SCN, even though the adjudicating authority was aware that efforts were on for obtaining the records seized. We find that the appellants were not provided the non-relied upon documents and thus were denied an opportunity to file a written reply to their satisfaction and to represent themselves during the personal hearing. However, we find that the lapse on the part of the Revenue is a curable defect. The appellants were not provided the non-relied upon documents and thus were denied an opportunity to file a written reply to their satisfaction and to represent themselves during the personal hearing. However, we find that the lapse on the part of the Revenue is a curable defect. In the interest of Justice, reasonable opportunity needs to be given to the Revenue to cure the defect and to conduct the adjudication adhering to the principles of natural Justice. Such an opportunity is only possible when the case is remanded back to the adjudicating authority so that the defects are cured and rectified and an opportunity is given to the respondents to file a reply and to attend the personal hearing. Tribunal cannot set aside the order for curable defects and more so when huge evasion of duty is alleged. It is pertinent to note that neither the Appellants and nor the Department have submitted anything in their defence as far as the merits of the case are concerned. Under the circumstances, we find that it would be travesty of justice if the Tribunal decides the matter on merits. The only course, available is to send the case back to the adjudicating authority for passing the order after curing the defects i.e. after observing principles of natural justice in letter and spirit. The appeals are allowed by way of remand to the adjudicating authority for de novo consideration after observing the principles of natural justice - The concerned authorities are directed to make available documents/copies, a request for which is already made, to the appellants, within 4 weeks of receipt of this order.
Issues Involved:
1. Alleged evasion of central excise duty by suppression of facts and clandestine removal of goods. 2. Non-return of non-relied upon documents to the appellants. 3. Violation of principles of natural justice. 4. Adequacy of the opportunity given to appellants for personal hearing and submission of replies. 5. Validity of the ex-parte order passed by the Commissioner. Detailed Analysis: 1. Alleged Evasion of Central Excise Duty: The case involves a group of companies engaged in manufacturing various goods, accused of evading central excise duty by suppressing facts and clandestinely removing finished excisable goods without paying the duty, and undervaluing such goods during 2011-12 and 2012-13. The DGCEI conducted searches and seized several documents, proposing recovery of ?67,28,17,794/- as unpaid duty along with interest and penalties under Sections 11A(4) and 11AA of the Act. 2. Non-return of Non-relied Upon Documents: The appellants contended that non-relied upon documents were not supplied within the stipulated time, violating Rule 24A of Central Excise Rules, 2002. They argued that the delay in receiving these documents hindered their ability to prepare a comprehensive reply to the show cause notice. Despite multiple requests and partial returns of documents, the appellants claimed they did not receive all necessary documents, which was crucial for their defense. 3. Violation of Principles of Natural Justice: The appellants argued that the Commissioner’s actions violated the principles of natural justice by proceeding with hearings and passing the order without ensuring that all non-relied upon documents were returned. This, they claimed, deprived them of a fair opportunity to present their case. They cited several judicial precedents and CBEC circulars emphasizing the necessity of returning non-relied upon documents to uphold natural justice. 4. Adequacy of Opportunity for Personal Hearing and Submission of Replies: The appellants were given multiple dates for personal hearings, but they argued that these were scheduled without ensuring the return of all non-relied upon documents. They maintained that they needed sufficient time to prepare their replies after receiving the documents. The Commissioner’s insistence on proceeding with the hearings despite incomplete document returns was seen as an attempt to rush the adjudication process. 5. Validity of the Ex-parte Order: The Commissioner proceeded ex-parte, citing non-cooperation and delay tactics by the appellants. However, the Tribunal found that the appellants were not given adequate time and necessary documents to prepare their defense, thus violating natural justice principles. The Tribunal emphasized that the department should have ensured the return of documents and provided reasonable time for the appellants to respond. Tribunal's Decision: The Tribunal concluded that the principles of natural justice were violated due to the non-return of documents and insufficient time given to the appellants to prepare their defense. The Tribunal found that the defects in the adjudication process were curable and remanded the case back to the adjudicating authority for de novo consideration. The adjudicating authority was directed to provide the requested documents within four weeks, allow the appellants eight weeks to submit their replies, and complete the adjudication within eight weeks thereafter. The appellants were instructed to cooperate and avoid unnecessary delays. Conclusion: The appeals were allowed by way of remand, emphasizing the need for adherence to natural justice principles and proper procedural conduct in adjudication proceedings. The case underscores the importance of providing all necessary documents and reasonable time to the parties involved to ensure a fair hearing and decision.
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