2015 (10) TMI 971 - HC - Central Excise

Denial of CENVAT Credit - Maintainability of appeal - Held that - Before returning the appeal to the petitioner the petitioner has not been called upon to explain on the maintainability of the appeal before the Commissioner (Appeals-I). It is also important to note that even if the appeal preferred by the petitioner before the Commissioner is not maintainable the authority ought to have passed a reasoned order that too after giving a reasonable opportunity of hearing to the petitioner. Hence the petition is accepted. - matter remanded back - Decided in favour of assessee.

Summary

Issues:
- Jurisdiction of the appellate authority to decide the appeal
- Opportunity of hearing not provided before returning the appeal
- Maintainability of the appeal before the Commissioner (Appeals-I)

Jurisdiction of the Appellate Authority:
The petitioner challenged a decision dated 3.9.2009 by the Customs, Excise and Service Tax Appellate Tribunal, which was partly allowed. Subsequently, the petitioner's representation regarding adjustment of availing Cenvat credit was partly accepted by the Commissioner. However, when the Superintendent of Central Excise called for a penalty and interest, the petitioner filed an appeal under Section 35 of the Act. The petitioner requested a personal hearing but received a communication stating that the appeal should be filed before the Tribunal, not the Commissioner. The High Court found that the authority should have decided the appeal on merits, including the question of maintainability, before returning it to the petitioner. The Court held that the appeal should be decided by the Commissioner after providing an opportunity of hearing to the petitioner.

Opportunity of Hearing:
The petitioner's advocate argued that the petitioner was not given an opportunity of hearing before the communication dated 17th September 2014 was issued, returning the appeal. The advocate contended that the appellate authority should have decided the appeal on its merits, including its maintainability, before returning it. The Court agreed, emphasizing that the petitioner should have been given a chance to explain the maintainability of the appeal before the Commissioner (Appeals-I). The Court ruled in favor of the petitioner, setting aside the communication and directing the Commissioner to decide the appeal after affording the petitioner an opportunity of hearing.

Maintainability of the Appeal:
The respondent's advocate argued that the authority had no jurisdiction to decide the appeal, leading to its return to the petitioner for presentation before the appropriate Tribunal. However, the Court found that the authority should have provided a reasoned order after giving the petitioner a fair opportunity of hearing, even if the appeal was not maintainable before the Commissioner. The Court accepted the petition, setting aside the communication and directing the Commissioner to decide the appeal after granting a hearing to the petitioner. The Court emphasized that all questions, including maintainability, should be addressed after providing an opportunity of hearing to the petitioner.