1995 (2) TMI 230 - AT - Central Excise

Summary

Issues:
1. Validity of demand raised on RT 12 returns for April and May 1990 under Section 11A of the Central Excise Act.
2. Compliance with principles of natural justice in finalizing the assessment and issuing the order of demand.

Analysis:
1. The appeal was filed by the Revenue against the order of the Collector of Central Excise (Appeals), Hyderabad, regarding the demand made on RT 12 returns for April and May 1990. The lower appellate authority set aside the demand, citing Section 11A of the Central Excise Act. The Revenue argued that the demand was valid as per Rule 173-I, allowing for assessment and demand of differential duty. The Superintendent finalized the assessment on 1-6-1990 and 21-6-1990, demanding a differential duty of 5% for the two months. The Consultant for the Respondent contended that the assessment was premature and lacked natural justice as the respondents were not given a proper opportunity to represent their case. The Tribunal observed that the Superintendent should have issued a show cause notice and provided a hearing to the respondents before finalizing the assessment. The order of demand was deemed invalid due to the lack of compliance with natural justice principles.

2. The Consultant further argued that the finalization of the assessment without affording an opportunity of hearing and considering their response to the show cause notice was against the principles of natural justice. The Tribunal agreed, stating that the Superintendent's order demanding differential duty without proper opportunity for representation was not sustainable in law. The lower appellate authority's decision to set aside the order under Section 11A was criticized for lacking reasoning and clarity. The Tribunal emphasized the importance of following due process and affording parties a fair hearing before finalizing assessments and issuing demands. Consequently, the Tribunal set aside the lower appellate authority's order and remanded the matter to the Superintendent for a fresh consideration after providing the respondents with an opportunity to be heard.

In conclusion, the Tribunal found the demand raised on the RT 12 returns for April and May 1990 to be invalid due to non-compliance with natural justice principles. The case was remanded for a fresh consideration with proper opportunity for the respondents to present their case, emphasizing the importance of following due process in excise duty assessments and demands.