2005 (7) TMI 429 - AT - Central Excise

Summary

Issues: Violation of natural justice - Non-supply of documents and denial of personal hearing

In this case, the appellants challenged an order confirming duty and penalty against them for clandestine removal of goods during the disputed period. The main contention raised was the violation of natural justice due to the non-supply of documents and the denial of a personal hearing before passing the impugned order. The Counsel argued that even though the appellants did not reply to the show cause notice (SCN), they were entitled to a personal hearing to explain the documents collected by the Revenue. The Counsel cited a precedent where the High Court observed that a party is entitled to a hearing before the final adjudication order, even if they did not respond to the SCN.

The Department, on the other hand, argued that despite providing sufficient opportunities, the appellants failed to reply to the SCN. They claimed that all documents were supplied along with the SCN, referring to acknowledgments from the appellants. However, upon review of the records, it was found that the Department's claim was not substantiated. The appellants had requested documents multiple times, and discrepancies were noted in the Department's responses. It was concluded that the appellants were not provided with all documents at the start of the proceedings, and the delay in the proceedings could not be solely attributed to the appellants.

The Tribunal acknowledged that the impugned order was indeed passed in violation of natural justice principles. As a result, the order was set aside, and the case was remanded to the adjudicating authority for a fresh decision. The appellants were granted a reasonable opportunity to inspect the required documents and respond to the SCN. The adjudicating authority was instructed to finalize the case within six months from the receipt of the order, ensuring a personal hearing for the appellants. Consequently, the appeals and stay applications were disposed of, emphasizing the importance of upholding principles of natural justice in such proceedings.