2023 (6) TMI 948 - AT - Central Excise

Clandestine Removal - shortages of finished goods - demand on the basis of gate pass/gate slips, for which no corresponding Central Excise invoices was found - violation of principles of natural justice - HELD THAT - In this case, the Adjudicating Authority has violated the principles of natural justice passing the order ex parte in hurry without waiting for reconciliation statement filed by the appellant. Therefore, the impugned order has no merit. Accordingly, the same is set aside. In these circumstances, the matter is remanded back to the adjudicating authority for fresh adjudication after considering the reconciliation statement filed by the appellant in respect of gate passes matching with the Central Excise invoices - Appeal is allowed by way of remand.

Summary

Issues: Alleged clandestine removal of goods, violation of principles of natural justice, demand of duty, interest, and penalty.

Clandestine Removal of Goods: The appellant was in appeal against the order demanding duty for alleged clandestine removal of goods, along with interest and penalty. The Revenue raised duty demand for certain periods based on gate passes without corresponding Central Excise invoices, alleging that goods were cleared clandestinely without payment of duty. The appellant contested the matter and submitted sample reconciliation for a specific period to show clearance of goods on the strength of Excise invoices. However, the impugned order was passed before the appellant could submit a reconciliation statement for the entire disputed period, leading to a violation of principles of natural justice.

Violation of Principles of Natural Justice: The appellant argued a gross violation of principles of natural justice, as the adjudicating authority passed the impugned order in haste without waiting for the reconciliation statement to be filed. The appellant contended that there was no evidence to support the allegation of clandestine removal, as no transporter was identified to establish how the goods were transported or manufactured. Due to the lack of corroborative evidence, the demands were deemed unsustainable, and the impugned order was set aside on this ground.

Remand and Directions: The Tribunal found that the impugned order had no merit due to the violation of natural justice and remanded the matter back to the adjudicating authority for fresh adjudication. The adjudicating authority was directed to consider the reconciliation statement filed by the appellant regarding gate passes matching with Central Excise invoices. Additionally, the Tribunal kept other legal or factual issues open for the appellant to raise before the Adjudicating Authority. The appellant was directed to approach the Adjudicating Authority within fifteen days from receipt of the order for a new hearing, and the Adjudicating Authority was instructed to pass a proper order in accordance with the law within three months from the date of the fixed personal hearing.

Conclusion: The appeal was allowed by way of remand, emphasizing the importance of adhering to principles of natural justice and ensuring a fair adjudication process in matters involving duty demands and allegations of clandestine removal of goods.