2008 (1) TMI 412 - HC - Central Excise

Natural justice - Whether inspection of documents including relied upon documents by the representative of the assessee was sufficient compliance of natural justice or not? Held that - The law does not require that principles of natural justice may seem to have been followed but in fact the record must reveal that principles of natural justice have actually been followed. The finding of the Tribunal in this regard is categorical and to the point. The Tribunal has found, as a matter of fact, after considering the record as it stands, that the documents on which reliance had been placed right from the stage of the show cause notice by the revenue were not supplied to the assessee despite repeated written requests. In relation to the alternative contention suffice it to state that no such request appears to have been made in the first instance, before the Tribunal so as to find fault with the Tribunal of not granting an opportunity to the department. In fact it was lack of opportunity in so far as the assessee was concerned and the department cannot seek second innings considering the fact that more than a decade had elapsed from the initiation of proceedings viz. 1997. No substantial question of law arises. Appeal dismissed.

Summary

Issues:
- Whether inspection of documents by the representative of the assessee was sufficient compliance with natural justice.
- Whether the Tribunal erred in setting aside lower authorities' orders without remanding the case for fresh decision after compliance with natural justice principles.

Analysis:

Issue 1: Inspection of documents and natural justice compliance
The applicant sought reference of two questions of law regarding the sufficiency of document inspection in terms of natural justice. The Standing Counsel argued that the Tribunal's order was appealable under Section 35G of the Central Excise Act, not Section 35H. The Tribunal concluded that lower authorities' orders lacked natural justice compliance, leading to their quashing. The Addl. Standing Counsel contended that the Commissioner (Appeals) found the assessee had been granted inspection of relied-upon documents, implying natural justice adherence. However, the Tribunal, after reviewing the record, found that the revenue did not supply these documents to the assessee despite repeated requests, contradicting the Commissioner's findings.

Issue 2: Remand of the case for fresh decision
The Tribunal's decision to set aside lower authorities' orders without providing consequential directions for remand was challenged. The Addl. Standing Counsel argued that if natural justice principles were violated, the Tribunal should have allowed the department to supply the documents and continue proceedings from the show cause notice stage. However, the Tribunal's finding was clear that the revenue failed to provide relied-upon documents to the assessee, indicating a breach of natural justice. The lack of a specific request to grant the department an opportunity by the Tribunal further solidified the decision.

The High Court, after considering the facts and circumstances, rejected the application/appeal, emphasizing the absence of any substantial question of law arising from the Tribunal's order. The Court highlighted the importance of actual compliance with natural justice principles rather than mere appearances, supporting the Tribunal's decision based on the record. The Court also dismissed the alternative contention regarding granting the department a second opportunity, citing the prolonged duration of the proceedings and the lack of initial fault on the Tribunal's part.