2023 (11) TMI 572 - AT - Customs

Principles of natural justice - ex-parte order - Levy of Customs Duty - raw material used and contained in the excess shrinkage and waste generated in the manufacture of excisable goods in the appellant s EOU - HELD THAT - The impugned order was passed ex-parte. From the observation made by the Adjudicating authority in the impugned order, it is clear that the appellant have neither availed the hearing given on various dates nor even filed the reply. It was also noted that the company was closed and all the hearing notices were returned. Now it is found that since the appellant are before us by filing the appeals and also effectively made present on the date of hearing and argued their case, through their Advocates the appellant are very much in contact. Accordingly, one opportunity can be given to the appellant to present their case before the Adjudicating authority. The matter remanded to the Adjudicating Authority for passing a fresh order after allowing the personal hearing and for filing reply/ submission to the appellant - appeal allowed by way of remand.

Summary

Issues involved:
The appeal challenges custom duty/ Excise duty demand on raw material used in excess shrinkage and waste generated in the manufacture of excisable goods in the EOU.

Custom Duty/ Excise Duty Demand:
The appellant challenged the duty demand on raw material used in excess shrinkage and waste in the manufacture of excisable goods. The appellant's counsel argued that once duty-free raw material is used in manufacturing finished goods, forgone duty cannot be demanded. The counsel cited precedents like CCE Vs. Sanjari Twisters and Vandevi Texturisers Pvt. Ltd. Vs. CCE to support this argument. The Authorized Representative for the revenue reiterated the findings in the impugned order.

Ex-Parte Order and Natural Justice:
The Tribunal noted that the impugned order was passed ex-parte as the appellant failed to attend the hearings and did not reply to the notices. The Adjudicating Authority observed that despite multiple opportunities for hearings, the appellant did not respond, leading to the order being passed ex-parte. However, the Tribunal found that the appellant was present during the appeal hearing and effectively argued their case through their advocates. Considering this, the Tribunal set aside the impugned order and remanded the matter to the Adjudicating Authority for a fresh order after allowing personal hearing and submission from the appellant.

The appeal was allowed by way of remand to the adjudicating authority, providing the appellant with an opportunity to present their case. The decision was pronounced in the open court on 09.11.2023 by the Hon'ble Members of the Tribunal.