2024 (4) TMI 1062 - SC - Central Excise

Validity of order of High Court remanding back the order for re-consideration - Failure of the Department to follow the instructions given by the CESTAT - Doctrine of Merger - Clandestine removal - excess quantities of stock were stored for illicit removal - absence of document containing detailed explanation - HELD THAT - The direction issued by the tribunal undisputedly has got merged with order dated 27.11.2008 it would be apt and appropriate to note at this juncture itself the contention raised by Shri Shekhar Naphade learned Senior Counsel which is to the effect that by virtue of the direction issued by the tribunal under its order dated 06.09.2006 having attained finality the authorities subordinate to the CESTAT having failed to comply with the directions so issued should have resulted in automatic allowing of the appeals by the High Court though at first blush looks attractive same cannot be accepted for reasons more than one. Firstly the direction so issued by the tribunal on 06.09.2006 included a direction to the respondent to pass orders afresh which had resulted in respondent passing the orders on 21.11.2008 and 27.11.2008 respectively - Secondly the High Court under the impugned order has itself observed that letter dated 20.01.2001 has not been relied upon by the revenue as an adverse document against the assessee while adjudicating the SCN s - Thirdly it has been the consistent stand of the respondent-department that the said letter was in fact supplied to the assessee s representative and the same has been discussed in threadbare by the High Court under the impugned order. The High Court has opined and rightly so that the said letter dated 20.01.2001 (with enclosures) which is claimed by the appellant has not having been furnished is only a ruse for not replying to the show cause notices and it would in no way prejudice the appellant s claim particularly in the background of reliance not having been placed by the respondent-authority for adjudicating the SCN s and in the absence of prejudice having been caused to the appellant no fault can be laid at the doors of the respondent. The High Court has also rightly not remitted the matter to the adjudicating authority for considering the matter afresh and the findings of the High Court recorded under the impugned order having been affirmed it is deemed appropriate to reserve the liberty to the appellant to urge all contentions before the tribunal including the one urged before this Court namely to demonstrate as to how prejudice has been caused to the appellant by non-furnishing of the said letter dated 20.01.2001 (with enclosures) and contentions of both parties are kept open and the order of remand made to the tribunal by the High Court under the impugned order would stand affirmed subject to the observations made. The appeals stand disposed of.

Issues Involved:
1. Non-furnishing of the letter dated 20.01.2001 and its enclosures.
2. Compliance with the principles of natural justice.
3. Jurisdiction and finality of tribunal's orders.
4. Remand of the matter by the High Court.

Summary:

1. Non-furnishing of the letter dated 20.01.2001 and its enclosures:
The appellant argued that the tribunal's direction to provide the letter dated 20.01.2001 and its enclosures was not complied with by the respondent, which should have resulted in the automatic allowing of the appeals. The High Court observed that the letter dated 20.01.2001 was not relied upon by the revenue as an adverse document against the assessee. The High Court noted, "the said letter, dated 20.01.2001 is not available with the Revenue. It is claimed by the assessee that copy of the said letter is also not available with the assessee."

2. Compliance with the principles of natural justice:
The tribunal had earlier set aside the orders and remanded the matter with specific directions including supplying the letter dated 20.01.2001. The respondent failed to provide the letter, leading to the appellant's claim of denial of natural justice. The High Court found that the letter was an explanation by the appellant and not an adverse document, stating, "Referring a document in the show cause notice itself need not be construed as though a reliance is also placed by such authority on such document to take an adverse inference against the assessee."

3. Jurisdiction and finality of tribunal's orders:
The appellant contended that the tribunal's order dated 06.09.2006 had attained finality and should not have been modified. The High Court held that the tribunal's direction included passing fresh orders, which the respondent did on 21.11.2008 and 27.11.2008. The High Court noted, "the authorities subordinate to the CESTAT having failed to comply with the directions so issued should have resulted in automatic allowing of the appeals by the High Court."

4. Remand of the matter by the High Court:
The High Court remanded the matter back to the tribunal for fresh adjudication. The Supreme Court affirmed this decision, stating, "the order of remand made to the tribunal by the High Court under the impugned order would stand affirmed subject to the above observations." The appellant was given liberty to argue all contentions before the tribunal, including demonstrating the prejudice caused by non-furnishing of the letter dated 20.01.2001.

Conclusion:
The appeals were disposed of with no order as to costs, and the remand to the tribunal was affirmed, allowing the appellant to raise all contentions before the tribunal.

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