1994 (11) TMI 234 - AT - Central Excise

Summary

Issues Involved:
1. Sustainability of the impugned order in law and on facts.
2. Procedural fairness and principles of natural justice.
3. Allegations of suppression and clandestine removal of goods.
4. Access to seized documents and floppy discs for defense.
5. Verification of D-3 intimations and RT-12 assessments.

Issue-Wise Detailed Analysis:

1. Sustainability of the Impugned Order in Law and on Facts:
The appellants contested the impugned order, arguing it was unsustainable both legally and factually. They highlighted that the Assistant Collector of Central Excise, after thorough investigation, issued a show cause notice limiting the demand to six months due to lack of evidence of suppression. Despite this, the Collector initiated proceedings for a longer period based on the same evidence, which the appellants argued was against procedural fairness.

2. Procedural Fairness and Principles of Natural Justice:
The appellants contended that they were denied a fair opportunity to defend themselves. They argued that the Department seized 108 floppy discs containing critical information but only provided 30 for reconciliation, leading to a violation of natural justice. The Tribunal noted that the lower authority did not adequately address the appellants' plea for access to these floppy discs, which was essential for their defense.

3. Allegations of Suppression and Clandestine Removal of Goods:
The Department alleged that the appellants supplied new ribbons under the guise of old ones and removed new ribbons clandestinely. The Tribunal observed that the appellants had been regularly filing D-3 intimations and maintaining necessary records, including RT-12 returns. It was noted that the lower authority did not sufficiently investigate whether the appellants had suppressed information or manipulated records, given the extensive documentation and periodic checks by the Department.

4. Access to Seized Documents and Floppy Discs for Defense:
The Tribunal highlighted that the appellants had computerized their data, and full access to the seized floppy discs was crucial for their defense. The lower authority's failure to provide either the floppy discs or the relevant documents constituted a denial of natural justice. The Tribunal emphasized that the appellants should have been given the opportunity to interpret the data from the floppy discs to support their case.

5. Verification of D-3 Intimations and RT-12 Assessments:
The Department's representative argued that the gate pass numbers in the D-3 intimations did not match in some cases and that dealers received new ribbons instead of re-inked ones. However, the Tribunal noted that the lower authority did not provide the results of any verification or investigation to the appellants. The Tribunal found that the lower authority's approach was not fair, as the appellants were not given the necessary information to correlate their records with the Department's findings.

Conclusion:
The Tribunal set aside the impugned order, citing procedural unfairness and denial of natural justice. The matter was remanded for de novo consideration, with instructions to provide the appellants with all relevant documents and an opportunity for a fair hearing. The Tribunal emphasized the need for the Department to cooperate with the appellants to expedite the proceedings, given the significant revenue involved. The appeal was allowed by remand.