1998 (4) TMI 192 - AT - Central Excise

Summary

Issues: Violation of principles of natural justice in re-determination of liability under Section 3A of the Central Excise Act, 1944.

In this case, the Commissioner of Central Excise re-determined the capacities and liability of the applicants without providing an opportunity for a hearing or disclosing the basis of re-determination. The applicants contended that this violated the principles of natural justice. The learned Advocate for the applicants argued that the impugned orders were passed in gross violation of natural justice as the applicants were not given a chance to present evidence in support of their actual production. The appellants had requested re-determination of their liability due to the closure of furnaces, but their requests were not addressed by the Commissioners. The Tribunal agreed with the Advocate's submissions and set aside the findings in the impugned orders, directing the Commissioners to re-determine the duty liability in accordance with the provisions of sub-section (4) of Section 3A.

In response to the contentions, the JDR representing the Respondents argued that in one case, the Commissioner re-determined the annual capacity and liability based on the applicant's own declaration, and in the other case, the capacity was adjusted due to a change in the relevant notification. The JDR defended the Commissioner's determinations in both cases.

The learned Advocate, in his rejoinder, reiterated that the re-determination by the Commissioner did not provide any substantial basis and failed to consider the actual production figures of the applicants. He highlighted that one furnace was closed with proper intimation to the Commissioner, and the actual production was lower than what was re-determined. The Advocate emphasized that the Commissioner should consider the evidence presented by the applicants and issue an order in line with natural justice principles.

After considering the arguments from both sides, the Tribunal concurred with the Advocate's contentions that the impugned orders were passed without adhering to the principles of natural justice. Consequently, the Tribunal set aside the findings in the impugned orders and instructed the Commissioners to re-determine the duty liability in strict compliance with the provisions of sub-section (4) of Section 3A. As a result, the appeals were allowed, and the stay petitions were disposed of.