2004 (10) TMI 190 - AT - Central Excise

Summary

Issues:
Challenge to withdrawal of fortnightly duty payment facility by Superintendent of Central Excise without proper officer's order; Time-barred demands; Violation of Principles of Natural Justice; Revenue implications; Reference to Larger Bench.

Analysis:

1. Challenge to Withdrawal of Facility:
The appellants challenged the withdrawal of the fortnightly duty payment facility by the Superintendent of Central Excise without an order from the proper officer, i.e., the Assistant/Deputy Commissioner. They argued that the withdrawal was improper and that only a proper officer has the authority to cancel such a facility. The appellants cited various judgments, including a Supreme Court judgment and rulings from other High Courts, to support their contention. The Tribunal noted that in a similar case, the Punjab & Haryana High Court had held that such withdrawal by a Superintendent was a violation of Principles of Natural Justice. The Tribunal, following the precedent set by the High Court and the Supreme Court, upheld the appellants' contention and set aside the order canceling the benefit of fortnightly payment of duty.

2. Time-barred Demands:
The appellants also argued that the demands made were time-barred and would have resulted in revenue neutrality. They referred to a Supreme Court judgment to support their claim that they did not have the intention to evade duty. The Tribunal agreed with this argument, stating that the demands were indeed time-barred, and even if the duty had been paid on a consignment basis, the appellants would have been eligible for the benefit of Modvat credit, leading to revenue neutrality. Therefore, the Tribunal ruled in favor of the appellants on this issue as well.

3. Violation of Principles of Natural Justice:
The issue of violation of Principles of Natural Justice arose concerning the withdrawal of the duty payment facility without following due process. The Tribunal emphasized that the appellants were not issued a Show Cause Notice as required by the rules, and the action taken by the Superintendent was not in accordance with the provisions of Rule 173G(1)(e). Citing the judgment of the Punjab & Haryana High Court, the Tribunal held that such actions without proper officer intervention were against the Principles of Natural Justice. Consequently, the Tribunal set aside the impugned order based on this violation.

4. Revenue Implications and Reference to Larger Bench:
The learned JDR raised concerns about the revenue implications of the decision and suggested referring the issue to a Larger Bench. However, after careful consideration, the Tribunal found no need for such a reference. The Tribunal reiterated the findings of previous cases and emphasized that the withdrawal of the facility by the Superintendent was not in line with legal requirements. Therefore, the Tribunal dismissed the suggestion for a reference to a Larger Bench and proceeded to decide the case based on existing legal precedents.

5. Judicial Precedents and Decision:
The Tribunal highlighted the importance of following judicial discipline and precedent set by previous rulings. Referring to a specific case, the Tribunal concluded that the impugned order should be set aside and the appeal allowed based on the principles established in previous judgments. The Tribunal emphasized the need to uphold consistency in decisions and ruled in favor of the appellants, granting them consequential relief as deemed necessary.