2015 (4) TMI 165 - HC - Central Excise

Validity of the order passed - Violation of principle of natural justice - Opportunity of hearing not granted - Held that - A reading of Section 33-A (1) and (2) of the Central Excise Act together would make the position very clear that affording an opportunity of hearing to the licensee is mandatory else it would defeat the very purpose of the Act. In this case the petitioner has produced documents along with their objection dated 18.12.2014 and sought time to appear for personal hearing. Pursuant thereto, by a communication dated 14.11.2014, the second respondent called upon the petitioner to appear on any of the three days mentioned therein. On receipt of the same, the petitioner, by a letter dated 18.12.2014 requested the second respondent to have the personal hearing on any date after 15.01.2015. However, such request made by the petitioner has not been considered by the second respondent. - final order of adjudication is in contravention to the principles of natural justice - Therefore, the impugned order is set aside - Decided in favour of assessee.

Summary

Issues:
Challenge to order of the 2nd respondent regarding violation of principles of natural justice and mandatory procedure under Section 33-A(1) and (2) of the Central Excise Act, 1944.

Analysis:
The Writ Petitioner challenged the final order dated 26.12.2014 passed by the 2nd respondent, alleging a lack of opportunity for a hearing as required by Section 33-A(1) and (2) of the Act. The petitioner argued that the impugned order violated the principles of natural justice by not granting sufficient time for a personal hearing, which is mandatory under the Act. On the other hand, the Additional Government Pleader contended that the petitioner had been given adequate opportunity to defend the proceedings, and the Act only requires affording an opportunity to the assessee without mandating specific conditions for the adjudicating authority.

Upon reviewing the provisions of Section 33-A(1) and (2) of the Act, it was found that the petitioner had submitted detailed explanations and requested a personal hearing after producing documents. The second respondent initially called for an enquiry on specific dates, to which the petitioner responded by requesting a hearing after 15th January 2015 due to their legal team's unavailability. However, the second respondent proceeded to pass the final order on 26.12.2014 without considering the petitioner's request, thereby failing to adhere to the mandatory requirement of granting an opportunity of hearing as per the Act. Consequently, the impugned order was set aside, and the writ petition was allowed without costs.

The court directed the petitioner to deposit 2.5% of the tax liability demanded by the respondents within four weeks and appear before the second respondent on 20.04.2015 to present all documentary evidence in support of their claim. The second respondent was instructed to consider the evidence and pass an order on merits and in accordance with the law. The judgment emphasized the importance of following procedural requirements to ensure the principles of natural justice are upheld in adjudication proceedings under the Central Excise Act, 1944.