2015 (12) TMI 235 - HC - Central Excise

Ex-parte order without service of any notice - Clandestine removal of final product from two different units Joint liability - Violation of principle of natural justice - Held that - Commissioner in her affidavit has admitted that the impugned order was passed without service of any notice thereby meaning no opportunity of hearing was granted to the petitioner. The tribunal directed the Commisioner to provide opportunity of cross examination of the witnesses, which has been denied by the Commissioner in paragraph no.107 of the impugned order. The justification given by the officer in paragraph no.3 of her affidavit is that the petitioners were under an obligation to appear before the authority concerned pursuant to the order of the tribunal and that it was incumbent upon the petitioner to approach the adjudicating authority for a decision afresh. - Adjudication proceedings is initiated on the basis of a show cause notice issued by the department and denovo proceedings has to be started, if any, by the department itself. Issuance of a fresh notice not only flows from Article 14 of the Constitution but also from the provisions of the Central Excise Act. In our opinion the stand adopted by the Commissioner is nothing else but an after thought in trying to justify her action in passing an ex parte order. - Impugned order is set aside - Decided in favour of assessee.

Summary

Issues:
Quashing of an order by the Commissioner, Customs, Central Excise & Service Tax; Violation of principles of natural justice; Transfer of adjudication proceedings to another competent officer.

Analysis:
The High Court entertained a writ petition seeking to quash an order passed by the Commissioner, Customs, Central Excise & Service Tax, despite the availability of alternative remedies. The background involved an order imposing duties and penalties, which was challenged in appeal and remitted back for fresh decision. The Tribunal's order emphasized fixing liability separately for individuals. However, the Commissioner passed an ex parte order without providing notice or opportunity of hearing, justifying it as an obligation for the parties to approach the adjudicating authority. The Court found this a violation of natural justice principles, as per Article 14 of the Constitution and Central Excise Act, emphasizing the need for fresh notice and cross-examination rights.

Regarding criminal proceedings sanctioned against the petitioners, it was revealed that incomplete facts were presented to the sanctioning authority, leading to prosecution despite the appellate order setting aside the original decision. The Commissioner's actions, including passing an ex parte order against a deceased individual, raised concerns of deliberate harassment. The Court noted the lack of fairness in the proceedings and ordered the impugned order to be set aside, directing the transfer of adjudication proceedings to another competent officer for a fair hearing in line with the Tribunal's order.

The Court cited legal precedents emphasizing the importance of natural justice, including the right to adduce evidence and cross-examine witnesses. It highlighted the denial of these rights as a violation of natural justice principles. Despite not delving into the criminal prosecution aspect to avoid influencing those proceedings, the Court emphasized the need for fairness and adherence to natural justice in administrative actions. The judgment concluded by allowing the writ petition, setting aside the ex parte order, and transferring the adjudication proceedings to ensure a fair hearing for the petitioner.