1998 (5) TMI 198 - AT - Central Excise

Summary

Issues:
1. Time-barred demand of duty and penalty imposed under Central Excise Rules, 1944.
2. Violation of principles of natural justice due to non-disclosure of comments by Anti-Evasion Branch.
3. Initiation of proceedings in 1985 for the demand relating to the period 1979-80 to 30-4-1984.

Issue 1: Time-barred demand of duty and penalty:
The appellant contested the demand of duty and penalty imposed by the Addl. Collector, Central Excise, for the period 1979-80 to 30-4-1984. The appellant argued that they had informed the Revenue about their manufacturing process in 1979, which was acknowledged by an officer exempting the goods from duty. However, the Addl. Collector found discrepancies in the appellant's submission. The officer stated that the letter informing about the manufacturing process was not received or recorded in official records until it was produced along with the reply to the show cause notice in 1986, two years after a visit by Revenue officers. Consequently, the demand was upheld as the letter was not part of the official record, leading to a rejection of the appellant's claim of informing the Revenue in 1979.

Issue 2: Violation of principles of natural justice:
The Addl. Collector relied on comments from the Anti-Evasion Branch regarding the appellant's reply to the show cause notice. However, these comments were not disclosed to the appellants before the adjudication order was passed. This lack of disclosure deprived the appellants of the opportunity to respond to the comments and rebut them, constituting a violation of the principles of natural justice. The failure to provide an opportunity to address the comments led to the impugned order being set aside due to procedural irregularities.

Issue 3: Initiation of proceedings in 1985 for the period 1979-80 to 30-4-1984:
The proceedings for the demand related to the period of 1979-80 to 30-4-1984 were initiated by the Revenue through a show cause notice issued in 1985. Despite the initiation of proceedings in 1985, the impugned order did not provide a fair opportunity for the appellants to address the issues raised. In the interest of justice, the impugned order was set aside, and the appeal was allowed rather than remanding the matter for de novo adjudication.

In conclusion, the judgment highlighted the importance of adherence to procedural fairness, emphasizing the need for disclosure of all relevant information to the parties involved in legal proceedings to ensure a just and equitable outcome.