2009 (1) TMI 552 - AT - Central Excise

Natural justice - Hearing - Adjournment not granted - Impugned order set aside - Matter remanded to original authority for fresh decision

Summary

Issues: Violation of Rule 8 of the Central Excise Rules, 2002; Proper opportunity of hearing not granted; Adjudication procedure under Section 33A of Central Excise Act, 1944.

Violation of Rule 8 of the Central Excise Rules, 2002:
The appellants, engaged in manufacturing Gas Cylinders, Pressure Vessels, and Heat Exchangers, availed Cenvat credit facility but allegedly failed to pay duty by the due date, violating Rule 8 of the Central Excise Rules, 2002. The Department contended that the appellants paid the duty from their Cenvat Account during the material period, emphasizing the violation of Rule 8(3A) of the Rules. However, the Tribunal found that the proper opportunity of hearing was not granted to the appellants, as the hearing was scheduled for three dates in one notice, and the appellant's request for adjournment was not considered as an adjournment for three times as stipulated by Section 33A of the Central Excise Act, 1944.

Proper opportunity of hearing not granted:
The Tribunal highlighted the importance of adhering to the principles of natural justice, emphasizing that fairness in the adjudication process is crucial. It was noted that issuing one hearing notice for three dates did not align with the principles of natural justice. The Tribunal emphasized that fairness requires giving parties a fair hearing to state their case and view. In this case, the appellants were not provided with a proper opportunity to defend their case, leading to the impugned order being set aside. The matter was remanded to the Commissioner to decide afresh after granting the appellants a proper opportunity of hearing. The appellants were directed to appear before the Commissioner to fix the date of hearing and expedite the decision-making process.

Adjudication procedure under Section 33A of Central Excise Act, 1944:
The Tribunal referred to Section 33A of the Central Excise Act, 1944, which provides for the adjudication procedure. It was highlighted that the proviso to Section 33A stipulates limitations on granting adjournments during proceedings. The Tribunal emphasized that in this case, the appellant's request for adjournment did not amount to three adjournments as specified by the Act. Therefore, the Tribunal concluded that the appellants were not granted a proper opportunity of hearing as required by law, necessitating the setting aside of the impugned order and remanding the matter for a fresh decision after granting a fair hearing to the appellants.