2024 (9) TMI 836 - AT - Central Excise

Levy of Excise Duty - income shown in Profit and Loss Account can be presumed as income from sale of dutiable goods and subjected to excise duty in absence of any other evidence or not - CENVAT credit availed based on valid invoices and admittedly upon receipt of inputs/input services - denied on the ground of erroneous filing of NIL returns during the period - violation of principles of natural justice. HELD THAT - The Adjudicating Authority has not provided the vital report given by the Divisional Assistant Commissioner to the appellant. Thus, he has gravely erred by not complying the principles of natural justice. Moreover, regarding difference between the ER1 return and profit and loss account the appellant claimed that they have submitted all the documents which were also not considered properly by the adjudicating authority. Therefore, the impugned order is suffered from non-compliance of principles of natural justice. The impugned order is set aside - matter remanded to the Adjudicating Authority - Appeal allowed by way of remand.

Summary

Issues:
(i) Whether income shown in Profit and Loss Account can be presumed as income from sale of dutiable goods and subjected to excise duty in absence of any other evidence?
(ii) Whether CENVAT credit availed based on valid invoices and admittedly upon receipt of inputs/input services can be denied on the ground of erroneous filing of NIL returns during the period?

Analysis:

Issue (i):
The appellant argued that the order was non-speaking and solely based on assumption and presumption, violating natural justice. They contended that the verification report relied upon in the order was not provided to them, causing a procedural irregularity. The demand raised was on a presumption basis without justifying the difference between ER-1 and the profit and loss account for the year 2016-2017. The appellant submitted documents explaining the difference, which were not considered. The Tribunal found that the Adjudicating Authority failed to provide the vital report by the Divisional Assistant Commissioner to the appellant, breaching principles of natural justice. Consequently, the impugned order was set aside, and the matter was remanded for de novo adjudication, ensuring the appellant's right to a fair hearing.

Issue (ii):
Regarding the denial of CENVAT credit due to erroneous filing of NIL returns, the appellant's counsel cited various judgments to support their argument. The Deputy Commissioner for the Revenue reiterated the findings of the impugned order, suggesting a remand for fresh adjudication. The Tribunal observed that the adjudicating authority did not properly consider the documents submitted by the appellant, leading to a non-compliance with the principles of natural justice. As a result, the impugned order was overturned, and the matter was remanded to the Adjudicating Authority, emphasizing the appellant's entitlement to a fair opportunity to present their case.

In conclusion, the appeal was allowed by way of remand to the Adjudicating Authority, ensuring the appellant's right to a fair hearing and proper consideration of all relevant documents and evidence.