2008 (12) TMI 217 - HC - Central Excise

Summary

Issues:
Challenge to order withdrawing monthly payment of excise duty and CENVAT credit utilization for a specific period.

Analysis:
The petitioners challenged the order withdrawing the facility of monthly payment of excise duty and CENVAT credit utilization for a defined period, issued by the Member (Central Excise) on 24th November, 2008. The petitioners contended that the order exceeded the proposal made by the Chief Commissioner of Central Excise, Vadodara, as it extended the withholding of CENVAT credit from three to six months. They argued that they should have been given a hearing by the authority passing the final order, which was the Member (Central Excise), Govt. of India, despite a hearing already conducted by the Chief Commissioner. In response, the respondents argued that a separate hearing by the Member was not necessary after the Chief Commissioner's hearing, citing a decision of the Gujarat High Court in a related matter.

The court acknowledged the discrepancy between the proposal and the final order regarding the duration of withholding CENVAT credit and recognized the exceptional circumstances of the case. The respondents agreed that the petitioners should be heard by the Member (Central Excise), Govt. of India, in light of the unique facts presented. The petitioners requested permission to utilize CENVAT credit until a fresh order was passed, maintaining a balance of Rupees One crore from the accumulated credit during this period.

Consequently, the court set aside the impugned order dated 24th November, 2008, and directed the Member (Central Excise), Govt. of India, New Delhi, to hear the petitioners and issue a new order within three weeks. The petitioners were instructed to cooperate, attend without seeking adjournments, and provide the full case record. The court clarified that its decision was specific to the circumstances of this case and not to be considered a precedent for others. It emphasized that setting aside the order did not imply a judgment on the case's merits, leaving all arguments open for determination by the Member (Central Excise). Additionally, if the new order was unfavorable to the petitioners, the time elapsed during the proceedings before the court would be excluded from the final decision.