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2023 (2) TMI 943 - HC - Central ExciseValidity of order decided by the revisional authority who has not heard the petitioner - Change of revisional authority - Denial of Rebate claim - allegation is limited to the accumulated CENVAT credit lying in balance prior to 01.03.2010 having lapsed during the time of opting Central Excise Exemption Notification No.30/2004-CE dated 09.07.2004 HELD THAT - Without entering into as to whether the interpretation made is in accordance with law or not, this Court notices that the revisional authority itself has made a note of the fact that there was a change of the revisional authority - Relying on the written submissions of the petitioner of 09.09.2019, where it had requested to pass the order considering the documents available in record and they did not want any personal hearing since one such hearing had already taken place on 18.09.2019 has been relied upon to decide the matter on the strength of the record. Even if it is a matter of interpretation of the Rules, the Court is of the firm opinion that the authority which hears the matter should be deciding and not the other authority. Assuming that the petitioner would have nothing else to further add, it is a serious violation of principles of natural justice, if the authority which heard the matter is different than the one which actually adjudicates. - Matter restored back. Petition allowed.
Issues Involved:
1. Breach of the principle of natural justice. 2. Simultaneous availment of Notifications No. 29/2004-CE and 30/2004-CE. 3. Legality of accumulated CENVAT credit utilization. 4. Interpretation of Rule 11(3) of CENVAT Credit Rules, 2004. 5. Validity of rebate claims on exported goods. Issue-wise Detailed Analysis: 1. Breach of the Principle of Natural Justice: The petitioner argued that the Principal Commissioner (RA) did not provide an opportunity for a fresh hearing after the change of adjudicating authority, thereby violating the principle of natural justice. The court noted that the revisional authority relied on the petitioner's written submissions requesting to pass the order based on available documents and not requiring a personal hearing. However, the court emphasized that the authority which hears the matter should be the one to decide it. This serious lapse led the court to interfere with the order, quashing it and directing a fresh personal hearing. 2. Simultaneous Availment of Notifications No. 29/2004-CE and 30/2004-CE: The petitioner maintained separate records under both notifications, as confirmed by the Commissioner (Appeals). The Board Circular No. 795/28/2004-CX dated 28.07.2004 allowed simultaneous availment of both notifications. The court found that the petitioner had been availing both notifications simultaneously and keeping separate records, thus complying with the requirements. 3. Legality of Accumulated CENVAT Credit Utilization: The petitioner argued that the accumulated CENVAT credit legally availed before 09.07.2004 should be allowed to be carried forward and utilized. The court noted that the petitioner had utilized fresh CENVAT credit for the production of exported goods and debited the duty at the time of removal of goods from the factory. The revisional authority's allegation that the petitioner utilized the accumulated CENVAT credit lying in balance as of 01.03.2010 was found unsustainable. 4. Interpretation of Rule 11(3) of CENVAT Credit Rules, 2004: The respondent contended that Rule 11(3) required the lapse of the entire balance of CENVAT credit once the assessee opted for full exemption under Notification No. 30/2004-CE. The court examined the detailed interpretation of sub-rules 3(i) and 3(ii) of Rule 11, which obligates the manufacturer to pay an amount equivalent to the CENVAT credit taken for inputs if opting for exemption from the whole duty of excise on the final product. The revisional authority interpreted that excess CENVAT credit lying in balance as of 09.07.2004 should have lapsed on 01.03.2007 when sub-rule (3) of Rule 11 was introduced. 5. Validity of Rebate Claims on Exported Goods: The petitioner exported finished goods under Notification No. 29/2004 and filed rebate claims, which were rejected. The revisional authority held that the rebate claims were inadmissible as the duty was paid from lapsed CENVAT credit. The court noted that the petitioner had taken fresh credit for duty paid on raw materials and utilized it for the production of exported goods. The court found that the petitioner's rebate claims should not be held up, and interest should be provided for the delayed period of sanction of rebate claims. Conclusion: The court allowed the petition to the limited extent of quashing the ex-parte order of the revisional authority due to the breach of the principle of natural justice and directed a fresh personal hearing. The court emphasized that the authority which hears the matter should decide it, ensuring compliance with the principles of natural justice.
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