2012 (5) TMI 473 - AT - Central Excise

Duty demand - clearances of cigarettes alleged to have been made without payment of duty - penalty - applications for waiver of the requirement of pre-deposit of duty demand and penalty - allegation against the GTC is that while MPTL, Durg is a dummy company floated by GTC, fully controlled by them and that actual operations right from the stage of procurement of raw materials, manufacture of cigarettes and transportation and marketing were being carried out and arranged by GTC, during the period from 12-10-90 to 31-3-92 clandestine clearances of cigarettes without payment of duty were made from MPTL s factory and thereby contravening various provisions of Central Excise Rules, 1944 and that the duty involved on these clandestine clearances Held that - after 15 years from the date of issue of show cause notice, the appellants claim that all the relied upon documents have not been supplied/allowed to be inspected - Even if there was stay on adjudication proceedings by the order of Hon ble Madhya Pradesh High Court, but still the relied upon documents could have been supplied as there was no stay on the same, matter is still un-adjudicated and the impugned order bearing 26-5-2010 has been issued but it is signed by the Commissioner who had retired in 2008. The order passed after 15 years is an ex parte and non-speaking order supposed to have been issued by an officer who had retired long time back, matter involving huge revenue being now 15 years old, we consider it appropriate to direct the Chairman of Central Board of Excise & Customs to monitor the de novo adjudication, appeals and the stay applications are disposed of

Summary

Issues Involved:
1. Validity of the Order-in-Original issued by a retired Commissioner.
2. Allegations of duty evasion and clandestine clearances of cigarettes.
3. Non-supply of relied upon documents to the appellants.
4. Violation of principles of natural justice.
5. Remand for de novo adjudication and directions for expeditious proceedings.

Detailed Analysis:

1. Validity of the Order-in-Original Issued by a Retired Commissioner:
The appellants contended that the Order-in-Original dated 26-5-2010 was defective and non-est since it was signed by a Commissioner who retired in 2008. The Department claimed the order was signed on 29-9-2000 but was issued later due to a stay by the Madhya Pradesh High Court. The Tribunal found no indication in the order of it being signed on 29-9-2000 and questioned how it could be dated 26-5-2010 by a retired officer. Consequently, the Tribunal deemed the order unsustainable.

2. Allegations of Duty Evasion and Clandestine Clearances of Cigarettes:
The Commissioner confirmed a duty demand of Rs. 49,63,87,299 against MPTL/GTC for alleged clandestine clearances of cigarettes without payment of duty from 12-10-90 to 31-3-95. The Tribunal noted that the allegations were based on extensive documentary evidence, including statements and seized records.

3. Non-Supply of Relied Upon Documents to the Appellants:
The appellants argued that they were not provided with copies of the relied upon documents, which were crucial for preparing their defense. The Department allowed inspection but did not complete the process. The Tribunal observed that even by April 2010, the documents had not been fully supplied, as indicated by correspondence between the DG, Central Excise Intelligence, and the appellants.

4. Violation of Principles of Natural Justice:
The appellants were not given an opportunity to reply to the show cause notice or a personal hearing, as the inspection of documents was incomplete. The Tribunal emphasized that a reasoned and speaking order should have been passed even if the appellants were allegedly non-cooperative. The Commissioner's order lacked detailed reasoning and discussion of evidence, leading to a violation of natural justice.

5. Remand for De Novo Adjudication and Directions for Expeditious Proceedings:
Given the procedural irregularities and the involvement of significant revenue, the Tribunal set aside the impugned order and remanded the matter for de novo adjudication. Specific directions were provided for expeditious completion:
- Inspection/Supply of Documents: To be completed within four months, with full cooperation from the appellants.
- Reply to Show Cause Notice and Personal Hearing: To be completed within four months after document inspection.
- Passing of Adjudication Order: To be done within two months post-hearing.

The Tribunal directed the Chairman of the Central Board of Excise & Customs to monitor the proceedings to ensure timely completion. The Registry was instructed to send copies of the order to the Secretary (Revenue) and the Chairman, Central Board of Excise & Customs.

Conclusion:
The Tribunal concluded that the order passed by the retired Commissioner was unsustainable due to procedural lapses and violations of natural justice. The matter was remanded for de novo adjudication with strict timelines to prevent further delays. The Tribunal expressed concern over the handling of the case and directed high-level monitoring to ensure expeditious resolution.