2012 (6) TMI 147 - AT - Central Excise

Reversal of CENVAT Credit on the goods cleared after availing the benefit of Notification No.30/2004-CE - refusal to give the copy of the report of Assistant Commissioner - Held that - As the adjudicating authority relied on the report of the Assistant Commissioner that the appellant has not reversed the correct CENVAT attributable to the inputs utilized in goods wherein the benefit of Notification No.30/2004-CE has been availed it has not followed the principle of natural justice to do not give a copy of the report of jurisdictional Assistant Commissioner to the appellant on repeated request so that they can defend the case before him - remand the matter back to adjudicating authority directing to give a copy of report to all these appellants and decide the issue after getting representation/defence against said report from the assessee.

Summary

Issues:
Three Stay Petitions filed against Order-in-Originals confirming demand, interest, and penalty. Benefit of exemption under Notification No.30/2004 denied due to credit reversal and equivalence issue. Appellants claim to have reversed proportionate credit. Adjudicating authority did not provide copy of Assistant Commissioner's report. Violation of principles of natural justice alleged.

Analysis:
The Tribunal considered three Stay Petitions against Order-in-Originals confirming demand, interest, and penalty. The issue revolved around the denial of exemption under Notification No.30/2004 due to credit reversal and equivalence concerns. The Tribunal noted that the appellants argued they had reversed proportionate credit and were entitled to avail benefits under Notifications No.29/2004-CE and No.30/2004-CE simultaneously, provided separate records were maintained. The appellants claimed the adjudicating authority did not consider their submissions properly and relied on a letter indicating credit reversal. On the other hand, the Revenue argued that the appellants failed to demonstrate before the adjudicating authority that they had reversed the credit as required. The Tribunal found that the issue could be disposed of at that stage, granted waiver of pre-deposit, and decided to take up the appeals for disposal.

The Tribunal observed that the adjudicating authority relied on the report of the jurisdictional Assistant Commissioner regarding credit reversal by the appellants. However, the appellants requested a copy of this report to defend their case, alleging a violation of natural justice. The Tribunal agreed that the adjudicating authority should have provided the report to the appellants to ensure a fair hearing. It held that the impugned orders were passed in violation of natural justice but directed the adjudicating authority to provide the report to the appellants and decide the issue after receiving their representation. The Tribunal emphasized the importance of following natural justice principles and instructed the appellants to cooperate with the adjudicating authority during the process.

Ultimately, the Tribunal allowed all the appeals by remanding the matter to the adjudicating authority, keeping all issues open for reconsideration. It stressed the need for the adjudicating authority to hear and dispose of the matter promptly, considering it was being remanded for the second time. The Tribunal's decision aimed to ensure a fair process and uphold the principles of natural justice throughout the proceedings.