2025 (4) TMI 567 - AT - Central Excise

Violation of principles of natural justice - Appellant was not given an opportunity of personal hearing in the matter to record his submission as to question of jurisdiction - refund claim - HELD THAT - The appeal was rejected on the ground that appellant was failed to file an appeal against earlier communication dated 22.09.2021 within the time stipulated under the Law. Appellant have given proper and satisfactory reason why he had not filed the appeal against the communication dated 22.09.2021 as stated in Memorandum of Appeal that on receipt of communication from Central Tax Gachibowli Division Hyderabad the appellant approached Jurisdictional Customs Authorities in relation to his refund claim however he was denied of filing any claim saying that the CVD and SAD duties are not customs components but clearly part of Cenvat duty . It is also important that no any opportunity of hearing has been given by the Adjudicating Authority. It is a Statutory procedure that no application for a refund should be rejected without giving an opportunity to the appellant of being heard. Hon ble Supreme Court in M/s Nagarjuna Construction Company Vs Government of Andhra Pradesh and Others 2008 (10) TMI 686 - SUPREME COURT in which Hon ble Supreme Court held that natural justice is another name for common sense justice. Rules of natural justice are not codified canons. But they are principles ingrained into the conscience of man. Natural justice is the administration of justice in a common sense liberal way. Justice is based substantially on natural ideals and human values. Conclusion - The Adjudicating Authority passed the order without giving proper opportunity of hearing which is against the natural justice and procedure established by law. Learned Commissioner (Appeals) also not considered these facts therefore appeal is liable to be allowed by way of remand with direction to decide refund claim on merit after giving proper opportunity to appellant. Appeal allowed by way of remand.

ISSUES PRESENTED and CONSIDERED

The primary legal issues considered in this judgment are:

Whether the appellant's refund application was improperly dismissed due to jurisdictional errors.
Whether the principles of natural justice were violated by not providing the appellant an opportunity for a hearing.
Whether the appellant's failure to appeal against the initial jurisdictional decision precludes the current appeal.

ISSUE-WISE DETAILED ANALYSIS

Jurisdictional Errors in Refund Application

Relevant Legal Framework and Precedents: The appellant's refund claim was initially rejected on jurisdictional grounds, with the Central Tax authorities stating that the duties in question had a customs component and should be addressed by Customs Authorities. However, the Customs Authorities denied the claim, asserting that the duties were part of Cenvat duty.
Court's Interpretation and Reasoning: The Tribunal recognized the confusion and lack of clarity regarding the appropriate jurisdiction for the refund claim. The appellant was caught in a jurisdictional dispute between Central Tax and Customs Authorities.
Key Evidence and Findings: The appellant provided evidence of attempts to file the refund claim with both authorities, each denying jurisdiction over the claim.
Application of Law to Facts: The Tribunal found that the jurisdictional dispute was not adequately addressed by either authority, leading to a denial of the appellant's claim without proper consideration.
Treatment of Competing Arguments: The Tribunal noted that the appellant's argument regarding jurisdiction was not properly addressed, and the authorities failed to provide a clear directive on the appropriate jurisdiction.
Conclusions: The Tribunal concluded that the jurisdictional issue needed proper adjudication and remanded the case for a decision on the merits.

Violation of Natural Justice

Relevant Legal Framework and Precedents: The principles of natural justice require that parties be given an opportunity to be heard before a decision is made. The appellant cited precedents emphasizing the need for a hearing, including Supreme Court decisions in Nagarjuna Construction Co. Ltd. and Kesar Enterprises Ltd.
Court's Interpretation and Reasoning: The Tribunal agreed that the appellant was not given a fair opportunity to present their case, violating the principles of natural justice.
Key Evidence and Findings: The appellant was not granted a personal hearing at the initial stages, and the subsequent appeal was dismissed without examining the merits.
Application of Law to Facts: The Tribunal found that the failure to provide a hearing was a procedural error that warranted a remand for reconsideration.
Treatment of Competing Arguments: The Tribunal acknowledged the Department's position but emphasized the importance of procedural fairness and the right to a hearing.
Conclusions: The Tribunal determined that the case should be remanded to ensure compliance with natural justice principles.

Failure to Appeal Initial Decision

Relevant Legal Framework and Precedents: The appellant did not appeal the initial jurisdictional decision within the stipulated time, leading to the dismissal of the current appeal as non-maintainable.
Court's Interpretation and Reasoning: The Tribunal considered the appellant's explanation for not appealing the initial decision, which was based on the confusion over jurisdiction.
Key Evidence and Findings: The appellant argued that the jurisdictional confusion justified their failure to appeal the initial decision.
Application of Law to Facts: The Tribunal found that the appellant's explanation was reasonable given the circumstances and the lack of clarity from the authorities.
Treatment of Competing Arguments: The Tribunal weighed the procedural requirements against the appellant's explanation and the broader context of jurisdictional confusion.
Conclusions: The Tribunal decided to allow the appeal by remanding the case for a decision on the merits, despite the procedural lapse.

SIGNIFICANT HOLDINGS

Preserve verbatim quotes of crucial legal reasoning: The Tribunal emphasized that "natural justice is another name for common sense justice," highlighting the importance of procedural fairness.
Core principles established: The judgment reinforced the principles of natural justice, particularly the right to a hearing, and clarified the need for clear jurisdictional directives from authorities.
Final determinations on each issue: The Tribunal allowed the appeal by remanding the case to the Adjudicating Authority with directions to decide the refund claim on its merits after providing the appellant with a proper hearing.