2006 (8) TMI 47 - AT - Central Excise

Central Excise -Demand and Penalty -Alleged that assessee continue to manufactured the excisable goods after surrendering the Central Excise registration -Appellant contended that they only traded in components -Non supply of documents sought by Appellant Matter remanded to adjudicating authority to decide a fresh after supply of all documents

Summary

Issues Involved:
- Confirmation of central excise duty demand
- Reduction of penalty amount
- Allegation of clandestine removal of excisable goods
- Rejection of request for supply of relevant documents
- Violation of principles of natural justice
- Denial of adequate opportunity of hearing

Confirmation of Central Excise Duty Demand:
The appellant, a registered manufacturer, surrendered the central excise registration certificate but was accused of continuing to manufacture excisable goods clandestinely without duty payment. The revenue alleged that despite surrendering the certificate, the appellant was involved in manufacturing activities, as evidenced by the concessional trade tax rate paid by the party. The appellant contended that they had ceased manufacturing and only traded components supplied to other parties, which could be proven from requested documents like bill books and sales registers.

Reduction of Penalty Amount:
The Commissioner (Appeals) confirmed the central excise duty demand but reduced the penalty imposed on the appellant. The appellant raised concerns about the denial of relevant documents by the authorities, impacting their ability to defend against the allegations. The appellant argued that the non-supply of crucial documents violated principles of natural justice and prejudiced their case, leading to a gross violation of fair hearing principles.

Allegation of Clandestine Removal of Excisable Goods:
The authorities seized documents like cash book, ledger, and sales register from the appellant but refused to provide requested documents such as the enquiry report of the range staff. The appellant claimed that the seized documents would have demonstrated that they were only trading components, not manufacturing finished products. The failure to supply these documents hindered the appellant's defense and affected the fairness of the proceedings.

Violation of Principles of Natural Justice:
The appellant argued that the authorities' refusal to supply relevant documents, including the enquiry report of the range staff, deprived them of a fair opportunity to present their case. The appellant emphasized that examining the contents of the seized goods and interviewing purchasers could have clarified whether the goods sold were components or finished products. The non-supply of requested documents violated the principle that no party should be condemned unheard.

Denial of Adequate Opportunity of Hearing:
The Tribunal found that the authorities' failure to provide requested documents infringed on the appellant's right to a fair hearing. The judgment set aside the earlier decision, remanding the matter to the adjudicating authority with a directive to supply all requested documents. The Tribunal emphasized the importance of considering all evidence and granting both parties a fair chance to present their arguments before reaching a decision.

This detailed analysis of the judgment highlights the issues involved, the arguments presented by the appellant, and the Tribunal's decision emphasizing the importance of upholding principles of natural justice and fair hearing in legal proceedings.