2017 (9) TMI 1488 - AT - Central Excise

Penalties - SSI exemption - clubbing of clearances - case of appellant is that Relevant documents were not made available to the appellants and the direction given by the Tribunal has not been followed - natural justice - Held that - this is a unique and peculiar case where the appellants on record have mentioned time and again that all the documents had been burnt out during Godra Riots. When there were Riots in the city, their factory was robbed and burnt on 27.02.2007. Therefore, the appellants had made a request to the Revenue for supplying copies of relied upon documents so that they could properly represent their cases - When this is a unique case where relied upon documents are not available either with the Revenue or with the appellants, we are unable to understand how could the proceedings progress and the liability of duty of Central Excise and the penalties against the appellants be sustained. The Hon ble Gujarat High Court in the case of CCE & C. Vapi vs Tuni Textile Mills Ltd. 2006 (1) TMI 51 - HIGH COURT GUJARAT observes that when assessee is not provided with copies of all relied upon documents by the Revenue, the proceedings against the assessee have rightly been set aside by the Tribunal on the ground of denial of natural justice. Appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Central Excise duty confirmation and penalties against multiple textile firms.
2. Clubbing of clearances of different firms.
3. Non-availability of relied upon documents and violation of principles of natural justice.

Analysis:
1. The judgment involves three appeals filed by BTI Textiles Pvt. Ltd. against the confirmation of Central Excise duty and penalties imposed on M/s Babu Textiles Industries, M/s FB Textiles, and M/s N.B. Textile Engg. The appeals challenged the order in original dated 22.09.2008, seeking to set aside the penalties and the duty. The case revolved around the creation of dummy units to claim small-scale exemption benefits, leading to the confirmation of duty and penalties by the Commissioner of Central Excise. The Tribunal remanded the case twice for fresh adjudication due to procedural irregularities and lack of separate findings for the units clubbed with M/s Babu Textiles Industries.

2. The primary issue addressed was the clubbing of clearances of different textile firms under the same administrative control. The appellants contested the clubbing of clearances, citing non-availability of relevant documents and failure to follow the Tribunal's directions. The Tribunal noted the absence of relied upon documents crucial for the proceedings, both with the Revenue and the appellants. Citing precedents from the Hon'ble Gujarat High Court, the Tribunal observed that denial of natural justice due to the unavailability of relied upon documents warranted setting aside the impugned order and allowing the appeals.

3. The critical aspect of the judgment focused on the non-availability of relied upon documents and the resulting violation of principles of natural justice. The Tribunal emphasized the importance of providing all relevant documents to the appellants for a fair adjudication process. Relying on legal precedents, the Tribunal concluded that the absence of relied upon documents hindered the appellants' ability to defend their case adequately, leading to a denial of natural justice. Consequently, the impugned order confirming the duty and penalties was set aside, and all the appeals were allowed based on the principles of natural justice and procedural fairness.

Overall, the judgment highlighted the significance of procedural regularity, the availability of relied upon documents, and adherence to principles of natural justice in ensuring a fair and just adjudication process in matters concerning Central Excise duty and penalties.