2024 (2) TMI 138 - AT - Central Excise

Refund claim - appellant has made payment of duty through PLA at Nil payment through CENVAT credit - Area based exemption vide Notification No.56/2002-CE dated 14.11.2002 and Notification No.01/2010-CE dated 06.02.2010 - ex parte order without giving any reasonable opportunity of hearing to the appellant - violation of principles of natural justice - HELD THAT - The impugned order passed by the learned Commissioner (Appeals) ex parte is without affording an opportunity of hearing to the appellant. Further, it is found that one consolidated hearing notice granting opportunity of hearing on three different dates i.e. 09.09.2022, 16.09.2022 and 23.09.2022 is clearly in violation of the principles of natural justice. This issue has been considered by the Hon ble High Court of Gujarat in the case of REGENT OVERSEAS PVT LTD AND 1 VERSUS UNION OF INDIA AND 1 2017 (3) TMI 557 - GUJARAT HIGH COURT wherein the Hon ble High Court has held as notice for personal hearing was Kat served upon the petitioners in accordance with law, no one could remain present for personal hearing on behalf of the petitioners on the dates specified in the notice and the adjudicating authority has proceeded on the footing that three adjournments have been granted and has passed and the impugned ex parte order. The impugned order is not sustainable in law and therefore, the same is set aside and the case remanded back to the learned Commissioner (Appeals) with the direction to decide the same on merits after giving reasonable opportunity of hearing to the appellant and thereafter pass a reasoned order in accordance with law - the appeals are allowed by way of remand.

Summary

Issues involved:
The issues involved in the judgment are related to the rejection of refund claims by the Commissioner (Appeals) without providing a reasonable opportunity of hearing to the appellant and violation of principles of natural justice in the process.

Issue 1: Refund Claim Rejection
The appellant, engaged in manufacturing pharmaceutical products, filed a refund claim under area-based exemption notifications for Central Excise duty paid through PLA/TR-6 challan. The Assistant Commissioner allowed a partial refund, but rejected a portion of the claim without a hearing or show-cause notice. The rejection was based on the appellant's payment of duty through PLA at Nil payment through CENVAT credit account under a specific notification. The appellant contended that the impugned order misinterpreted the exemption notifications and violated principles of natural justice by granting consolidated hearing dates without proper opportunity for the appellant to present their case.

Issue 2: Violation of Principles of Natural Justice
The appellant argued that the impugned order was unsustainable as it was passed ex parte without proper appreciation of facts and laws. The Commissioner (Appeals) granted three dates of hearings in one consolidated notice, which the appellant claimed was a violation of natural justice principles. The appellant cited a judgment by the Hon'ble High Court of Gujarat, emphasizing that such a consolidated notice providing multiple hearing dates is not in line with the provisions of the Act and does not afford adequate opportunity for a fair hearing. The Tribunal, after considering submissions from both parties and relevant legal precedents, found that the impugned order was indeed passed without affording the appellant a proper opportunity of hearing and was in violation of natural justice principles. Consequently, the Tribunal set aside the order and remanded the case back to the Commissioner (Appeals) with directions to decide the matter on its merits after providing a reasonable opportunity of hearing to the appellant.