2014 (4) TMI 949 - HC - Central Excise

Denial of rebate claim - Reply not filed in time - Ex parte order passed - Violation of principle of natural justice - Held that - impugned order passed is in violation of the Principles of Natural Justice. The notice was issued on 28.08.2007. 7 days time has been allowed to file the reply. Certain documents had been relied upon in the show cause notice. In paragraph 15 of the writ petition, it is stated that the said show cause notice has been received by the petitioner on 29th August, 2007, therefore, the petitioner has 7 days time to file the reply. According to the petitioner, the reply was filed on 4.09.2007. In paragraph 16 of the writ petition, it is stated that the reply of the show cause notice was filed, which has been replied by the paragraph 18 that the reply was not filed within time. It is further stated that it has been replied on 6th September, 2007 when the order was passed. The 7 days time granted to file the reply appears to be less and in as much as the authority should have waited up to 6th September 2007, while the order was passed exparte on 05.09.2007. Moreover admittedly the documents relied upon in the show cause notice have not been provided to the petitioner. - Matter remanded back - Decided in favour of assessee.

Summary

Issues:
Challenging order passed by Deputy/Assistant Commissioner, Customs & Central Excise on grounds of violation of Principles of Natural Justice and inadequate time for response.

Analysis:
The petitioner challenged the order dated 5.9.2007 issued by the Deputy/Assistant Commissioner, Customs & Central Excise, Moradabad, claiming that the response time provided in the show cause notice was insufficient. The petitioner argued that although the notice allowed 7 days for a reply, it was served on 29.08.2007, leaving inadequate time for a proper response. The petitioner contended that the reply was filed on 4.09.2007, but the respondent alleged it was received on 6.09.2007, leading to an ex parte order being passed on 05.09.2007. The petitioner also highlighted the lack of details regarding the alleged intelligence report, essential for contesting the allegations.

The respondent's counsel argued that the petitioner failed to file a reply, justifying the ex parte order. Additionally, it was asserted that the claimed rebate was rightly rejected due to the wrongful availing of CENVAT Credit on raw materials that did not enter the petitioner's factory premises. The court examined the submissions and records, concluding that the impugned order indeed violated the Principles of Natural Justice. Notably, the notice issued on 28.08.2007 allowed 7 days for a response, with the petitioner receiving it on 29.08.2007. The court found the response time inadequate, especially since the relied-upon documents were not provided to the petitioner, further hampering a fair hearing.

Based on the above considerations, the court set aside the impugned order, emphasizing the necessity of providing a proper and reasonable opportunity for a hearing. The matter was remanded to the Adjudicating Authority for a fresh order within six months, ensuring due process and compliance with the law. Consequently, the writ petition was allowed, granting relief to the petitioner.