1998 (2) TMI 325 - AT - Central Excise

Summary

Issues:
Appeal against duty demand disallowing Modvat credit under Rule 57H and Rule 57, based on invoices not in the name of appellants or issued by unregistered dealers. Violation of principles of natural justice, non-issuance of show cause notice, and lack of personal hearing. Need for leniency during transitional period of Modvat scheme. Allegations of procedural lapses and substantive violations. Use of intemperate language in the order.

Analysis:
The appeals arose from an Order-in-Appeal confirming duty demand disallowing Modvat credit under Rule 57H and Rule 57, based on invoices not meeting specified conditions. Appellants argued violation of natural justice, lack of show cause notice, and absence of personal hearing. They contended that the invoices showed the destination as Simbhaoli and cited precedents where substantive benefits were not denied due to technicalities. They emphasized the transitional period of the Modvat scheme for gunny bags. The authorities failed to appreciate the receipt and utilization of goods, evidenced by G.Rs and Form 31, leading to the denial of Modvat credit.

The order was criticized for not being a speaking order, failing to address the contentions raised, and using harsh language. The use of the term 'mafia' in the order was objected to. The lack of findings and reasoned order, as well as the failure to consider the submissions and case law cited, were highlighted. The judgment stressed the importance of temperate language in judicial conclusions, citing the need to avoid strong and intemperate criticism against differing views.

The Supreme Court's guidance on judicial language was invoked to set aside the order for impropriety and intemperate language, requiring a fresh consideration by the adjudicating authority. The non-issuance of show cause notice and the failure to verify registers, along with the procedural and substantive violations, necessitated a detailed speaking order in adherence to principles of natural justice. The need for personal hearing before passing the order was emphasized, leading to the remand of the matter to the original authority for a comprehensive reconsideration.

In conclusion, the judgment highlighted the significance of procedural fairness, reasoned orders, and temperate language in judicial proceedings. The remand to the original authority aimed to ensure a thorough examination of the issues raised, adherence to natural justice principles, and a detailed consideration of the submissions made by the appellants.