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TMI Blog2011 (6) TMI 600X X X X Extracts X X X X X X X X Extracts X X X X ..... ase of the Department that the chain of events in the present case will show a fraudulent attempt to evade the payment of duty. Hence, we are of the view that the order passed by the revisional authority is unsustainable. - matter remanded back. - Writ Petition No. 3959 of 2010, - - - Dated:- 28-6-2011 - Dr. D.Y. Chandrachud and Anoop V. Mohta, JJ. S/Shri M.I. Sethna, Sr. Advocate with Pradeep S. Jetly and Jitendra B. Mishra, Counsel, for the Petitioner. S/Shri Prakash Shah with Jas Sanghavi i/b. M/s.PDS Legal, Counsel, for the Respondent. [Judgment per : D.Y. Chandrachud, J. (Oral)]. This petition by the Union of India under Article 226 of the Constitution, is to challenge an order passed by the revisional authority in exercise of jurisdiction under Section 35EE of the Central Excise Act, 1944. The Assistant Commissioner had initially rejected rebate claims preferred by the First Respondent in the amount of Rs. 13.57 lakhs. In appeal, the Commissioner remanded the proceedings back to the adjudicating authority for reconsideration, after complying with the principles of natural justice. The First Respondent challenged that order of remand before the revisional ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gainst the manufacturer, but not against the First Respondent in the absence of material to indicate an act of abetment by the First Respondent. 6. The Commissioner (Appeals) noted that the manufacturer, Radha Dyeing and Printing Mills received raw materials from units which either did not exist or had issued bogus Cenvat documents. If the documents were from non-existent firms, there could be no accumulation of credit in the account. Hence, if no credit balance was properly available to discharge the duty on finished goods, it could not be held that the goods exported were duty paid goods. However, the Commissioner (Appeals) noted that though 4 ARE forms were involved, the First Respondent had neither submitted its reply nor had it appeared before the Assistant Commissioner for a personal hearing. The First Respondent was furnished an opportunity in the interests of justice by the Commissioner (Appeals) for producing relevant evidence before the Assistant Commissioner. It was, in this view of the mater that the proceedings were remanded back to the Assistant Commissioner. 7. The First Respondent challenged the order of the Commissioner (Appeals) before the revisional authority ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thority proceeded to enter a finding of fact that the First Respondent had purchased the goods bona fide and having exported the goods on the payment of the entire amount inclusive of duty, the First Respondent cannot be penalized by denying the claim for rebate. There is merit in the submission that the revisional authority ought not to have rendered such a finding of fact, for the first time, in the exercise of the revisional jurisdiction, particularly having regard to the background of the case which has already been noted earlier. 9. What we have observed above assumes some significance having regard to the nature of the submissions which have been urged before the Court by Counsel appearing on behalf of the Union of India. Counsel has adverted to the fact that a Show Cause Notice had been issued to Radha Dyeing and Printing Mills on 24 April 2008. The show cause notice inter alia contained an allegation that the transactions which had been put into place, were made to camouflage dubious transactions undertaken in collusion with various groups of suppliers. Alert circulars were issued by the Department declaring the units from which inputs have been purchased by Radha Dyeing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been paid to be determined. According to the Excise Department, the duty has not, in fact, been paid. The duty was sought to be paid by utilising Cenvat credit. The Cenvat credit was accumulated on the basis of duty paid documents brought up in collusion with nonexistent or bogus firms. These allegations would have to be enquired into by the adjudicating authority. We are, therefore, of the view that the proper course of action for the revisional authority would have been to allow the order of remand to stand so as to enable the First Respondent to have a full and proper opportunity of establishing its case for the grant of rebate. Instead the revisional authority has purported to make a finding of fact in the absence of virtually any material whatsoever and in the face of the case of the Department that the chain of events in the present case will show a fraudulent attempt to evade the payment of duty. Hence, we are of the view that the order passed by the revisional authority is unsustainable. 11. We accordingly quash and set aside the impugned order passed by the Joint Secretary in the Ministry of Finance, dated 10 July 2009. We maintain the order passed by the Commissioner (A ..... X X X X Extracts X X X X X X X X Extracts X X X X
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