1998 (7) TMI 346 - AT - Central Excise

Summary

Issues:
Prayer for dispensing with pre-deposit of duty and penalty, violation of principles of natural justice in passing the impugned Order.

Analysis:
The applicants sought dispensation of pre-deposit of duty and penalty amounting to Rs. 24,48,179.45 and Rs. 3 lakhs respectively. The argument put forth was that the Commissioner's Order was issued in gross violation of natural justice principles. The applicants received a show cause notice in November 1994, but due to a fire incident in December 1994, all documents, including the notice, were destroyed. Despite requesting copies of the notice and its annexures, they faced delays and were not provided with essential documents. The adjudicating authority fixed multiple hearing dates without considering the applicants' requests for adjournment due to unavailability of crucial documents. The applicants were unable to respond to the show cause notice without the necessary documents, leading to the demand of duty and imposition of penalty without fair consideration.

The Revenue contended that the applicants failed to take effective steps to procure the required documents from the Department over a span of three years. They argued that the applicants could have obtained photocopies of the documents during the prolonged period between hearings but did not do so. Consequently, the adjudicating authority proceeded with the case due to the applicants' perceived inaction in obtaining the necessary documents.

Upon reviewing the submissions from both sides, the Tribunal acknowledged the prolonged duration of the case and the delays in scheduling hearings. However, it was noted that the applicants consistently sought the required documents from the authorities, as evidenced by their correspondence. The Tribunal found that the Department's failure to provide the relied-upon documents hindered the applicants' ability to respond adequately to the show cause notice. Consequently, the Tribunal concluded that the impugned Order violated principles of natural justice and set it aside. The matter was remanded to the adjudicating authority for a fresh decision, emphasizing the importance of providing the necessary documents promptly to facilitate a fair adjudication process.

In light of the protracted proceedings, the Tribunal directed the applicants to promptly request and receive copies of the relied-upon documents from the Department. The Department was instructed to supply the relevant documents within one month, following which the applicants were to file their reply within the same period. The Collector was tasked with expeditiously adjudicating the matter after receiving the necessary documents and submissions. Additionally, the Commissioner was mandated to provide the applicants with an opportunity for an effective personal hearing before the adjudication process.

The Vice President clarified that the stay petition was addressed first, and since all essential aspects had been covered, the main appeal was also considered and remanded based on the grounds of violation of natural justice principles in the impugned Order.