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2022 (5) TMI 1398 - AT - Service TaxPrinciples of natural justice - Reply not given for notice served - alternative possibilities not considered - section 33A of Central Excise Act, 1944 - HELD THAT - The impugned order has placed reliance on the decision of the Hon ble Supreme Court in JETHMAL VERSUS UNION OF INDIA 1970 (3) TMI 57 - SUPREME COURT and the decision of the Tribunal in PATEL WIDECOM INDIA LTD. VERSUS COMMR. OF CUS. (ICD), TKD, NEW DELHI 2004 (5) TMI 110 - CESTAT, NEW DELHI . In Jethmal the issue arises from Sea Customs Act, 1878 which did not have a specific provision for issue of notice as exists in the present statute. The decision of the Tribunal in re Patel Widecom India Ltd arose from the refusal of the noticee to receive the show cause notice and is not in conformity with the circumstances in the impugned dispute. There are no justification for the peremptoriness of the adjudicating authority in foreclosing grant of opportunity to reply to the notice which would serve in disposal of the proceedings in a fair and judicious manner. On the contrary, he seems to have taken elaborate pains to controvert the essentiality of compliance with principles of natural justice. The haste, so demonstrated, is unseemly. We do not propose to dilate further on the inappropriateness of proceeding to adjudication without the benefit of some response from the noticee. Matter remanded back to the original authority for fresh adjudication after placing the appellant-noticee on notice of intent to take up, and complete, the adjudication process - appeal allowed by way of remand.
Issues:
Limited issue of tax liability determination without affording a hearing or awaiting response to show cause notice. Analysis: The appeal in this case concerns the order-in-original issued by the Commissioner of Central Excise & Customs, Nagpur – II Commissionerate, determining a tax liability of Rs. 1,13,21,769/- under section 73 of the Finance Act, 1994, along with interest and penalties, without providing the appellant, M/s Indo Unique Flame Limited, an opportunity to be heard or respond to the show cause notice. The appellant's counsel argued that despite the lack of response to the notice, a fair conclusion necessitates considering alternative possibilities, which the impugned order failed to do. The adjudicating authority proceeded to issue the impugned order under section 33A of the Central Excise Act, 1944, after noting the delivery of the notice and the absence of a written reply requesting a personal hearing. The Authorized Representative contended that it is the duty of the noticee to respond as per the law, emphasizing the importance of compliance with section 33A. The Tribunal referred to the decision of the Hon'ble Supreme Court in Jethmal v. Union of India and the decision of the Tribunal in Patel Widecom India Ltd v. Commissioner of Customs(ICD), TKD, New Delhi. The Jethmal case involved the Sea Customs Act, 1878, which lacked a specific provision for issuing a notice, while Patel Widecom India Ltd case dealt with a noticee's refusal to accept the show cause notice, which differs from the present circumstances. The Tribunal criticized the adjudicating authority's haste in proceeding to determine the tax liability without allowing the noticee an opportunity to respond, highlighting the importance of natural justice principles. Consequently, the Tribunal set aside the impugned order and remanded the matter to the original authority for fresh adjudication, emphasizing the need to notify the appellant-noticee of the intent to complete the adjudication process. In conclusion, the Tribunal's decision underscores the significance of affording the noticee a fair opportunity to respond before determining tax liability, emphasizing the principles of natural justice and the necessity for a judicious and fair adjudication process.
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