1992 (7) TMI 155 - AT - Central Excise

Issues Involved:
1. Confirmation of demands by the Collector of Central Excise, Kanpur.
2. Validity of the order passed beyond the four-month period directed by the Tribunal.
3. Denial of inspection of records/documents.
4. Violation of principles of natural justice.
5. Clubbing of clearances and reliance on other orders.

Detailed Analysis:

1. Confirmation of Demands by the Collector of Central Excise, Kanpur:
The appellants were aggrieved by the confirmation of demands made in the impugned order-in-original dated 18-1-1991. The learned Collector held that since the total clearance of steel furniture during the financial year 1972-1973 exceeded Rs. 2 lakhs, the appellants were not entitled to claim exemption of clearances up to Rs. 1 lakh under Notification No. 33/71 dated 1-4-1971 and Notification No. 101/72 dated 17-3-1972. The total value of steel furniture cleared during 1972-1973 was Rs. 2,53,723.63 P. The Tribunal noted that the confirmation of this order was improper as the Tribunal had previously set aside the order of the Collector of Central Excise, Kanpur dated 30-6-1978.

2. Validity of the Order Passed Beyond the Four-Month Period Directed by the Tribunal:
The Tribunal had directed the adjudicating authority to re-adjudicate the case within four months. The appellants contended that the impugned order, having been passed beyond this period, was invalid and null and void. The Tribunal acknowledged that the learned Collector did not comply with the four-month timeframe but concluded that this alone did not invalidate the adjudicating authority's power to adjudicate.

3. Denial of Inspection of Records/Documents:
The appellants were denied the opportunity to inspect the records/documents seized by the department, which they sought to rely on for their defense. The Tribunal had directed the Collector to give necessary facilities for inspection of documents and allow reasonable time to file a written reply after inspection. Despite several reminders, the appellants did not cooperate fully in providing a list of documents required for inspection. The learned Collector ultimately rejected their request for inspection, stating that the records asked for were not the relied-upon documents relevant to the case. The Tribunal found this rejection unjustified and held that the appellants should be given full and fair opportunity to inspect all documents.

4. Violation of Principles of Natural Justice:
The appellants argued that the impugned order was passed in violation of principles of natural justice as they were not afforded an opportunity for personal hearing. The Tribunal emphasized that justice should not only be done but should be seen to have been done. It was noted that the learned Collector did not provide a personal hearing despite clear directions from the Tribunal. This failure constituted a violation of the principles of natural justice.

5. Clubbing of Clearances and Reliance on Other Orders:
The appellants contended that the previous Collector's order suffered from patent errors, including the confirmation of clubbing of clearances based on some other order, which had not been put to the party. The Tribunal found that the learned Collector had relied on some other material to conclude against the party, which was not disclosed to them, thus violating the principles of natural justice.

Conclusion:
The Tribunal set aside the impugned order and remanded the case to the original authority with directions to accord inspection of all the documents relied upon by the appellants and referred to in their letter dated 11-8-1990. The appellants were to be given an opportunity to file written objections and a personal hearing was to be fixed. The adjudicating authority was directed to consider all defenses raised by the party and pass a speaking order. The appellants were instructed to fully cooperate and not protract the proceedings. If they failed to avail the opportunity of inspection on the date fixed by the department, the department was to proceed with the matter as per law.

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