1986 (11) TMI 197 - AT - Central Excise

Summary

Issues:
1. Confiscation of goods and imposition of penalty for removal without payment of Central Excise Duty.
2. Failure to provide a reasonable opportunity of being heard to the appellant before passing the impugned order.

Analysis:
1. The judgment concerns an appeal against an Order-in-Original confiscating 8800 H.M. Biris valued at Rs. 165 with an option to redeem on payment of a fine and demanding a duty of Rs. 83,317-90 for goods removed without paying Central Excise Duty, along with a penalty of Rs. 2,000. The appellant, a biri manufacturer, was found with an excess stock of biris during a surprise check, leading to the discovery of discrepancies in excise records. Despite a Show Cause Notice, the appellant failed to respond, resulting in an ex parte decision by the adjudicating authority based on available evidence, leading to the confiscation, duty demand, and penalty.

2. The appellant contended that they were not given a fair opportunity to defend themselves as required under Rule 233A of the Central Excise Rules, 1944. The appellant argued that documents relied upon by the authority were not provided with the Show Cause Notice, leading to delays in response. The appellant also highlighted the lack of a personal hearing before the impugned order was passed. In response, the Department contended that the appellant had opportunities to inspect documents and respond, but failed to do so in a timely manner. The Department argued that since no request for a personal hearing was made before adjudication, the question of granting one did not arise.

3. The Tribunal found that the impugned order could not be upheld due to the failure to provide the appellant with a personal hearing, a mandatory requirement under Rule 233A. Citing a previous case, the Tribunal emphasized the importance of affording a reasonable opportunity to be heard unless waived by the affected party. As a result, the Tribunal allowed the appeal, set aside the impugned order, and remanded the case to the Adjudicating Authority for a fresh adjudication after granting the appellant a fair opportunity for a personal hearing. The Cross-Objections were also disposed of accordingly.

4. In a separate order, another member of the Tribunal agreed with the decision to remand the case for fresh adjudication, emphasizing the importance of considering the appellant's reply and granting time for inspection of records. These formalities were deemed necessary due to the involvement of significant factual questions in the matter.

5. The judgment underscores the fundamental principle of natural justice requiring a fair opportunity to be heard before adverse decisions are made, highlighting the importance of procedural fairness in administrative and legal proceedings.