2005 (12) TMI 169 - AT - Central Excise

Summary

Issues:
Confirmation of duty and imposition of penalty without issuance of show cause notice.

Analysis:
The appeals were filed against the Order-in-Appeal, where it was found that three appellants were not manufacturers, but one appellant was held liable for duty payment. The main issue was whether the duty and penalty imposed without a show cause notice were legal. The appellant argued that the duty and penalty against them were improper as they were not issued a show cause notice. The Revenue contended that the duty was confirmed based on the appellant's assurance to pay. The Tribunal noted that the appellant was not put on notice by the lower authorities, which violated principles of natural justice. The Tribunal referred to previous judgments emphasizing the mandatory requirement of issuing a show cause notice before confirming a demand. It was held that the duty confirmation and penalty imposition without a show cause notice were against the law and set aside the orders.

The Tribunal highlighted the importance of a show cause notice in legal proceedings, citing previous judgments that emphasized the mandatory nature of issuing a show cause notice before confirming a demand. The absence of a show cause notice was deemed a serious violation of natural justice principles, leading to the proceedings being vitiated. The Tribunal clarified that the Central Excise Act does not provide for the waiver of a show cause notice, and confirming a demand without issuing one is unlawful. The re-calculation of duty and imposition of penalties without following due process were considered improper and were set aside.

In conclusion, the Tribunal found that the duty confirmation and penalty imposition without a show cause notice were illegal and violated principles of natural justice. The orders were set aside, and the appeals of the appellants were allowed, while the department's appeal was dismissed. The judgment emphasized the mandatory requirement of issuing a show cause notice before confirming a demand under the Central Excise Act, highlighting the importance of procedural fairness and adherence to legal principles in such matters.