2015 (1) TMI 798 - HC - Central Excise

Violation of the provisions of the Central Excise Act and Rules - Violation of principle of natural justice - Opportunity of hearing not given - Held that - Petitioner has filed an application, as evidenced by Ext. P3, under the provisions of Section 35F of the Central Excise Act, 1944. It was also submitted that the petitioner was not informed at any point of time that the appeal was defective and copy of the show cause has to be furnished. Even in the notice also, it was not mentioned that the appeal was defective and copy of the show cause notice should be furnished. The petitioner has sought for an adjournment, as the notice intimating the hearing was received only on the day previous to the day fixed for hearing. Hence it appears from record, that the petitioner was denied an opportunity of being heard. I see valid force in the submission of the learned counsel for the petitioner that the order evidenced by Ext. P7 is passed in violation of the principles of natural justice. - Tribunal is directed to re-hear the memorandum of appeal - Decided in favour of assessee.

Summary

Issues: Challenge to order under Central Excise Act - Violation of principles of natural justice - Maintainability of writ petition.

Analysis:

1. Challenge to Order under Central Excise Act:
The petitioner, a company engaged in the business of manufacture and sale of plywood, challenged an order dated 30-3-2007 by the Commissioner of Central Excise, which levied an amount with interest and penalty for alleged violations of the Central Excise Act. The petitioner had filed an appeal before the Customs Excise and Service Tax Appellate Tribunal, which was dismissed on the grounds of non-deposit of duty demanded or filing an application for waiver under Section 35F of the Central Excise Act. The petitioner claimed to have submitted an application for waiver and approached the High Court challenging the order (Ext. P7).

2. Violation of Principles of Natural Justice:
The petitioner contended that the order (Ext. P7) was passed in violation of the principles of natural justice as they were not informed about the defect in the appeal or provided with a copy of the show cause notice. The petitioner also alleged that they were denied an opportunity to be heard as the notice of hearing was received only a day before the scheduled hearing. The Court found merit in the argument that the order was passed without affording the petitioner a proper hearing, thus violating the principles of natural justice.

3. Maintainability of Writ Petition:
The respondents argued that the writ petition was not maintainable, citing a decision of the Division Bench of the Madras High Court. However, the Court disagreed, stating that the availability of the remedy of appeal before the Court did not preclude the petitioner from seeking relief through a writ petition, especially considering the violation of natural justice in this case. The Court allowed the writ petition, quashed Ext. P7, and directed the Tribunal to re-hear the appeal and dispose of it in accordance with the law, emphasizing the importance of providing a fair opportunity for the petitioner to present their case.

In conclusion, the High Court of Kerala held that the writ petition was maintainable due to the violation of natural justice in the proceedings, and ordered a re-hearing of the appeal by the Tribunal to ensure a fair and just decision in accordance with the law.