2000 (7) TMI 351 - AT - Central Excise

Summary

Issues involved:
Refund claim rejection, Modvat credit reversal, waiver of pre-deposit under Section 35F of the Central Excise Act, violation of principles of natural justice, setting aside of interim stay order and final order of the lower appellate authority.

Refund Claim Rejection and Modvat Credit Reversal:
The adjudicating authority rejected a refund claim of Rs. 1,05,000 and directed the party to reverse the Modvat credit of the same amount. The aggrieved party appealed against this order before the Commissioner (Appeals) and also sought a waiver of pre-deposit of the duty amount under Section 35F of the Act. The Commissioner (Appeals) disposed of the stay application without a personal hearing and directed the party to deposit the amount within three weeks. The party requested reconsideration citing Tribunal decisions for complete waiver, but the appeal was rejected solely based on non-compliance with the pre-deposit requirement.

Waiver of Pre-Deposit and Violation of Natural Justice:
The interim stay order and final order of the lower appellate authority were passed without affording the appellants a personal hearing, violating principles of natural justice. The lower appellate authority invoked a Supreme Court decision to dispense with the hearing, but the appellate authority failed to exercise discretion reasonably and did not provide reasons for finding against the party. The interim stay order lacked a rationale and was unsustainable in law, leading to the setting aside of both the interim and final orders.

Remand and Directions:
The judgment set aside the interim stay order and final order, remanding the matter to the Commissioner (Appeals) for a fresh decision on the stay application and the appeal. The Commissioner was directed to dispose of the stay application and appeal on merits, providing a reasonable opportunity for a personal hearing to the party. The decision on the appeal was to be a speaking order, ensuring compliance with the principles of natural justice and considering the results of the stay application.