2010 (6) TMI 241 - AT - Central Excise

Natural Justice- The appellants are engaged in the manufacture of abrasive stones classifiable under sub-heading 6801.90 of the schedule to the Central Excise Tariff Act, 1985. On allegation that the appellants evaded excise duty to the tune of Rs. 73,11,723/- by clandestine manufacture and removal of goods, the show cause notice dated 16-5-2005 came to be issued. Held that- no opportunity given to appellant to put forth their case in response to show cause notice. Total failure of principle of natural justice. Matter remanded to re adjudication.

Summary

Issues involved: Denial of fair opportunity to defend the case due to failure of principles of natural justice.

Analysis:
The case involved the appellants, engaged in manufacturing abrasive stones, facing allegations of evading excise duty. The show cause notice was issued, but the appellants failed to file a reply within the stipulated period. Despite requesting an adjournment and time to respond, the adjudicating authority proceeded to dispose of the matter without granting further opportunity to the appellants to defend their case. The main ground of challenge was the denial of a fair opportunity to the appellants to present their case.

The appellate tribunal noted that there was a lack of communication from the adjudicating authority to the appellants after the initial notices. The authority's decision to proceed without granting additional time for the appellants to respond, despite a significant gap between the personal hearing and the final order, was considered a failure of natural justice principles. The tribunal emphasized that the impugned order was passed without affording the appellants a fair opportunity to present their case, leading to a total failure of natural justice principles.

Consequently, the appeals were allowed, the impugned order was set aside, and the matter was remanded to the adjudicating authority. The authority was directed to provide the appellants with an opportunity to file a reply to the show cause notice and defend their case. The appellants were given three weeks to submit their reply, and the authority was instructed to hear the matter expeditiously and conclude it before a specified date. The tribunal's decision aimed to rectify the denial of a fair opportunity to the appellants and ensure a just resolution based on principles of natural justice.