2018 (1) TMI 1164 - AT - Central Excise

Remission of duty - requirements of notice and personal hearing - Rule 21 of Central Excise Rules, 2002 - principles of natural justice - Held that - the appellant have intimated the Department for the fire on 07.05.2012 within 6 days of the fire. The fact of the fire is not disputed by both the parties - also, necessary documents and the declaration were submitted to the Department by the appellant. The necessary documents were submitted by the appellant on 17.04.2013 and 22.04.2014. The declaration was contained in the claim filed by the appellant at Sr. No. 9. There has been clear violation of natural justice because there was no SCN, nor the appellant were given any opportunity of personal hearing at any stage by the adjudicating authority and the impugned order has been passed without reference to them - the matter requires to be remanded back to the adjudicating authority for fresh adjudication - appeal allowed by way of remand.

Summary

Issues:
Claim of remission of excise duty on finished goods due to a fire incident. Rejection of remission claim by the Commissioner based on various grounds. Lack of show cause notice and personal hearing by the adjudicating authority. Violation of natural justice in passing the impugned order without reference to the appellant.

Analysis:
The appellant filed an appeal against the rejection of their claim of remission of excise duty on finished goods following a fire incident. The appellant submitted the claim with necessary documents, including an application, F.I.R., insurance claim copy, and bills for fire tenders. The Commissioner rejected the claim after three years citing several grounds. These grounds included failure to intimate the Department within 24 hours of the fire incident, lack of details on precautions taken, non-submission of proof of reversal of Cenvat credit, absence of a declaration regarding duty amount not claimed from the insurance company, and being compensated by the insurance company for the finished goods. The appellant contended that they were not given a show cause notice or a chance for a personal hearing at any stage. The appellant argued that the requirements for remission were not prescribed in the statute, circular, or guidelines. The appellant also highlighted the submission of necessary documents and declarations to support their claim.

The Tribunal observed that the appellant had informed the Department about the fire within six days, submitted required documents and declarations, and had not been given sufficient opportunity to defend themselves. The Commissioner's decision lacked consideration of the documents submitted by the appellant, and there was a violation of natural justice due to the absence of a show cause notice and personal hearing. The appellant provided a chartered accountant report indicating that the insurance claim covered the basic value and did not include excise duty. Consequently, the Tribunal remanded the matter back to the adjudicating authority for fresh adjudication, emphasizing a fair opportunity for the appellant to present their case. The adjudicating authority was instructed to consider the documentary evidence and the chartered accountant certificate, while also taking into account the judicial pronouncements relied upon by the appellant.

In conclusion, the appeal was disposed of by way of remand, ensuring a fair process for the appellant and instructing the adjudicating authority to carefully examine the evidence and legal arguments presented.