2024 (2) TMI 1394 - AT - Central Excise

100% EOU - Clandestine Removal - Physical Exports - Deemed exports against advance licenses - DTA sale to another 100% EOU - ex-parte order passed - violation of principles of natural justice - HELD THAT - There is a force in the submission of the Learned Counsel made on behalf of the appellant in his synopsis dated 22.11.2023 that there is gross violation of principles of natural justice, in as much as the appellant has not been granted the effective hearing in the matter particularly, when the order was passed after almost two years from the date of hearing. It is also admitted that no examination-in-chief and subsequent cross-examination has been conducted by the learned Adjudicating authority, which is mandatory under section 9D of Central Excise Act, 1944. The issue of lack of jurisdiction also needs to be considered. The matter needs to be re-considered. Therefore, the impugned order is set aside - Appeal is allowed by way of remand to the Adjudicating authority for passing de-novo order within a period of three months from the date of this order.

Summary

Issues Involved:
Violation of principles of natural justice, lack of jurisdiction, reliance on recorded statements without cross-examination, delay in passing the order.

Analysis:

Violation of Principles of Natural Justice:
The appellant raised concerns regarding the violation of principles of natural justice, highlighting that the order was passed without granting any personal hearing and that there was a significant delay in issuing the order. The appellant's counsel emphasized that the Adjudicating Authority failed to conduct examination-in-chief and offer the witnesses for cross-examination as required by Section 9D of the Central Excise Act, 1944. The appellant cited relevant judgments, such as Shantilal Jain Vs. UOI and Excel Production Audio Visuals Pvt. Ltd. Vs. UOI, to support their argument. The Tribunal acknowledged these violations and deemed it necessary to set aside the impugned order for re-consideration, emphasizing the importance of adhering to principles of natural justice.

Lack of Jurisdiction:
Another crucial issue raised was the lack of jurisdiction, as the Show Cause Notice (SCN) was directed to the Surat-II Commissionerate, but the order was passed by the Commissioner of Bharuch Commissionerate without a valid corrigendum for this change. The appellant contended that this lack of jurisdiction rendered the impugned order invalid. Citing the Tribunal's judgment in Consolidated Enterprises Vs. CC, the appellant argued for the necessity of jurisdictional compliance. The Tribunal agreed with the appellant's submission and decided to remand the case to the Adjudicating Authority for a de-novo order within three months.

Reliance on Recorded Statements Without Cross-Examination:
The appellant also raised concerns about the Adjudicating Authority relying on recorded statements without conducting examination-in-chief and offering the witnesses for cross-examination, as mandated by Section 9D of the Central Excise Act, 1944. Drawing support from the Hon'ble High Court of Punjab & Haryana's decision in G-Tech Industries Vs. UOI, the appellant argued that this procedural lapse affected the fairness of the proceedings. The Tribunal recognized the importance of proper cross-examination and directed the Adjudicating Authority to re-examine the matter to ensure procedural compliance.

Delay in Passing the Order:
Furthermore, the appellant highlighted the significant delay between the first hearing and the issuance of the order, spanning almost two years. This delay was considered a violation of the appellant's right to a timely resolution of the matter. The Tribunal, after careful consideration of all submissions, found merit in the appellant's arguments and decided to set aside the impugned order, allowing the appeal for a re-examination by the Adjudicating Authority within a specified timeframe.