2024 (1) TMI 884 - HC - Central Excise

Maintainability of petition - availability of alternative remedy of appeal - not given scope to participate in the hearing - violation of principles of natural justice - HELD THAT - This Court finds that vide order dated 06.08.2007, the Customs Excise and Service Tax Appellate Tribunal, Eastern Bench, Kolkata remanded the matter as it found errors in the process of adjudication of the matter. Therefore, it is incumbent upon the authority to give due opportunity of hearing to the petitioners adhering to the direction of the CESTAT. If the authority did not follow the direction of the CESTAT, there is gross laches on the part of the authority in passing the order. Had the petitioners brought the fact to the notice of the CESTAT with regard to laches of the authority, in that event the CESTAT could have considered the same. Without doing so, the petitioners having approached this Court, the writ petition is not maintainable. This Court is not inclined to entertain this writ petition - Writ petition disposed off.

Summary

Issues:
The issues involved in the judgment are the quashing of an order confirming Central Excise duty demand, imposition of penalties, compliance with principles of natural justice, and the maintainability of a writ petition without availing alternative remedy of appeal.

Central Excise Duty Demand and Penalties:
The petitioners sought to quash an order confirming a Central Excise duty demand of Rs. 2,46,93,468/- against the petitioner-company, along with penalties imposed under various rules of the Central Excise Act, 1944. The petitioners contended that the order was passed without giving them an opportunity of hearing and without compliance with the principles of natural justice. They argued that the authority failed to provide certain requested documents, leading to a lack of proper adjudication. The petitioners highlighted that the Customs Excise and Service Tax Appellate Tribunal (CESTAT) had pointed out errors in the authority's order and remanded the matter for fresh adjudication, emphasizing the need for a fair hearing and document provision for just adjudication. However, the authority did not provide a hearing opportunity, especially in light of the COVID-19 situation, depriving the petitioners of natural justice.

Compliance with Principles of Natural Justice:
The petitioners contended that the order confirming the demand and imposing penalties was passed without giving them a fair opportunity of being heard and without providing requested documents for proper adjudication. They argued that the authority's failure to adhere to the principles of natural justice rendered the order unsustainable in the eyes of the law. Despite the appearance of learned counsel for the petitioners, the lack of a proper hearing opportunity, especially in virtual mode due to the pandemic, led to a gross deprivation of natural justice for the petitioner-company. The petitioners approached the Court seeking relief against the confirmed demand raised by the authority, emphasizing the importance of fair procedures in legal proceedings.

Maintainability of Writ Petition vs. Alternative Remedy:
The Senior Standing Counsel for the GST & Central Excise Department contended that although the authority provided a hearing opportunity, the petitioners did not avail it. It was argued that the petitioners should have appealed against the impugned order instead of directly approaching the Court through a writ petition. The Counsel emphasized the availability of an alternative remedy through the appeal process, making the writ petition not maintainable due to the existence of another legal recourse. The Court noted that the Customs Excise and Service Tax Appellate Tribunal had remanded the matter due to errors in adjudication, highlighting the importance of following due process and providing a fair hearing opportunity as directed by the Tribunal.

Disposition:
After considering the arguments from both parties and reviewing the records, the Court found that the authority failed to provide a proper hearing opportunity to the petitioners as directed by the CESTAT. The Court noted that the petitioners did not bring the authority's laches to the attention of the CESTAT before approaching the Court directly through a writ petition. Consequently, the Court held that the writ petition was not maintainable and declined to entertain it. However, the Court granted liberty to the petitioners to prefer an appeal, clarifying that no observations were made regarding the merits of the case. The writ petition was disposed of with this decision.