2021 (10) TMI 584 - AT - Central Excise

CENVAT Credit - import of copper scrap, brass scrap, zinc scrap, aluminum scrap as shown received in their factories - goods was diverted in the market but availed the Cenvat Credit thereon on the strength of bills of entry - principles of natural justice - HELD THAT - It is not only the correspondence between the appellant and DGCEI and the adjudicating authority but there are also number of letters written by the office of the adjudication authority to the DGCEI for supplying the required documents. This itself shows that the appellant have not been given all the relied upon documents at any point of time. Since, there is no dispute that the appellant were not supplied the relied upon document as mentioned by them, the adjudication should not have taken place in absence of providing the said documents to the appellant. In this fact which is not under dispute there is a gross violation of principle of natural justice on the part of the adjudicating authority. It is a settled law that principles of natural justice is the foremost requirement to be complied with before passing the adjudication order. The impugned order, since passed without observance of principles of natural justice, shall not sustain - the adjudicating authority is directed to supply all the relied upon documents to the appellants only thereafter sufficient opportunity for filing their defence and personal hearing be given before passing a denovo adjudication order - Appeal allowed by way of remand.

Summary

Issues: Violation of principles of natural justice in passing the adjudication order.

Analysis:
The appeals were filed against an Order-In-Original passed by the Principal Commissioner Central GST & Central Excise, confirming the demand of Cenvat Credit and penalties. The case alleged that the appellant availed Cenvat Credit for imported scrap materials but diverted them in the market. The appellant argued that the adjudication violated principles of natural justice as not all relied-upon documents were provided. The appellant cited various judgments supporting their case, emphasizing the importance of natural justice in legal proceedings.

The appellant repeatedly requested the department to supply the relied-upon documents, but not all documents were provided. The Assistant Commissioner representing the revenue claimed that all documents were supplied based on the acknowledgment of the Show Cause Notice. However, upon examination of the correspondence between the appellant and the department, it was evident that not all documents were shared. This lack of disclosure of relied-upon documents constituted a violation of natural justice.

The Tribunal found that the failure to provide all relied-upon documents to the appellant amounted to a gross violation of natural justice. It was established that principles of natural justice must be adhered to before passing an adjudication order. Citing various judgments, the Tribunal concluded that the impugned order, lacking observance of natural justice, could not be sustained. Therefore, the Tribunal set aside the impugned order and directed the adjudicating authority to provide all relied-upon documents to the appellant. The appellant was granted an opportunity for defense and a personal hearing before a denovo adjudication order was passed. The appeals were allowed, remanding the case back to the adjudicating authority for further proceedings.