2022 (1) TMI 1122 - AT - Central Excise

Remission of duty - Show Cause Notice was not issued by Commissioner to give opportunity to appellant to put their case - Rule 21 of the Central Excise Rules, 2002 - Violation of principles of natural justice - HELD THAT - The learned Commissioner has clearly recorded that the fire taken place in the factory of the appellant is similar to the fire which took place at the earlier occasion, despite this recording he has rejected the application on the ground that the appellant has not submitted the documents and their explanation that whether the fire was avoidable or non-avoidable - when the learned Commissioner was not inclined to grant the permission for remission of duty, he should have brought all the points to the notice of the appellant so the appellant could have made the proper defence and file the documents if any, required. Without informing the appellant regarding the views of the learned Commissioner for rejecting the remission application is clearly a violation of Principles of Natural Justice. The case of the remission of duty needs to be reconsidered by giving the opportunity to the appellant to make their submission on all the points which the learned Commissioner wants to raise - matter remanded to the Commissioner for passing afresh denovo adjudication order after granting the sufficient opportunity to the appellant to present their case - appeal allowed by way of remand.

Summary

Issues:
1. Rejection of application for remission of duty under Rule 21 of the Central Excise Rules, 2002.
2. Alleged violation of Principles of Natural Justice by the Commissioner.
3. Reversal of Cenvat Credit with reference to destroyed goods.
4. Need for reconsideration of remission of duty and credit reversal.

Analysis:
1. The case involved the rejection of an application for remission of duty under Rule 21 of the Central Excise Rules, 2002, after a fire incident destroyed excisable goods in the appellant's factory. The appellant appealed against the rejection by the Commissioner.

2. The appellant argued that the Commissioner's rejection lacked a Show Cause Notice, violating the Principles of Natural Justice. The Tribunal found that the Commissioner failed to inform the appellant of the reasons for rejection, preventing them from presenting a proper defense. This was deemed a violation of Principles of Natural Justice.

3. Additionally, the appellant raised a point regarding the reversal of Cenvat Credit concerning the destroyed goods. They cited relevant judgments to support their claim that the credit reversal was not required. The Tribunal acknowledged the need to reconsider this aspect in light of the cited precedents.

4. The Tribunal concluded that the case of remission of duty and the issue of credit reversal required reconsideration. It set aside the impugned order and remanded the matter to the Commissioner for a fresh adjudication. The Commissioner was directed to provide the appellant with an opportunity to present their case and explain any necessary details. The appeal was allowed for remand to the adjudicating authority, with the miscellaneous application also being disposed of.