2024 (5) TMI 519 - AT - Central Excise

Valuation adopted by the Respondent when the goods were cleared from their depots - Adoption of lower assessable value while clearing the goods from their depots and realising higher value of the sales taken up by them from their depot - Contradictory findings - period 2006 to 2011 on 27.12.2011 - extended period of limitation - HELD THAT - Since the findings of the Adjudicating Authority in the OIO and the findings of the Commissioner (Appeals) are contradictory in many places, in the interest of justice, the matter has to be remanded to the Adjudicating Authority to verify all these facts properly. The Respondent should be given copies of all the relied upon documents irrespective of whether the extract has been taken from Respondent s own record or they have been taken from some other source. After this, principles of natural justice should be followed and the Adjudicating Authority should pass a detailed and considered Order, both on merits as well as on account of limitation. Appeal allowed by way of remand.

Summary

Issues involved: Valuation of goods cleared from depots, Allegation of short payment of Excise Duty, Appeal allowed by Commissioner (Appeals), Revenue's appeal before Tribunal.

The issue in the present case is the valuation adopted by the Respondent when clearing goods from their depots. The Department issued a Show Cause Notice (SCN) for the period 2006 to 2011, alleging that the Respondent was realizing higher sales value from their depots and adopting lower assessable value, resulting in short payment of Excise Duty amounting to Rs.24,43,399. The Respondent did not file a reply to the SCN, leading to an ex-parte Order-In-Original (OIO) by the Adjudicating Authority. The Commissioner (Appeals) allowed the appeal on both merits and limitation, prompting the Revenue to appeal before the Tribunal.

The Revenue argued that the Respondent had opportunities to respond but failed to do so, and the Commissioner (Appeals) erred in allowing the appeal. However, upon review, it was found that the documents relied upon by the Department in the SCN were not included in the appeal papers, making it difficult to ascertain the basis of the investigation and demand quantification.

The OIO was decided on an ex-parte basis, with concerns raised regarding the number and dates of Personal Hearings granted. The Commissioner (Appeals) highlighted the lack of evidence to substantiate the demand for differential duty and ruled the SCN for the period 2006 to 2011 as time-barred under Section 11A of the Central Excise Act, 1944.

Due to contradictions between the OIO and the Commissioner (Appeals) findings, the Tribunal remanded the matter to the Adjudicating Authority for proper verification. The Respondent was directed to receive copies of all relied upon documents, and the Adjudicating Authority was instructed to issue a detailed Order within four months, ensuring compliance with principles of natural justice.

In conclusion, the Tribunal allowed the appeal by way of remand, emphasizing the need for a thorough review of facts and adherence to procedural fairness.