Opportunity of being heard

PJ/Case Laws/2010-11/1086

Case: M/s Hindustan Petroleum Corpn Ltd, Visakhapatnam v/s Commissioner of Central Excise & Customs, Visakhapatnam

Citation: 2010-TIOL-70-CESTAT-BANG

Issue:- Assessee should be given opportunity to present his case.

Brief Facts:- During the scrutiny of the records maintained by the appellants it appeared that they had recovered delivery charges, Barge/ Wharfage charges etc in excess of the value on which excise duty had been paid on clearances of various petroleum products to bunkers for coastal run vessels.

Show cause notice was issued proposing to demand duty not paid on these charges found to have been recovered under commercial invoices. The assessee did not reply to the show cause notice. The assessee did not substantiate before the Adjudicating Authority that the excess amounts collected were towards transportation eligible for abatement from the assessable value under Rule 5 of the Central Excise (Determination of Price of Excisable Goods) Rules, 2000.

The Commissioner found that the assessee had not shown transportation charges separately in the invoices so that the same could be deducted from the assessable value of the clearances made during the material period 01.08.2003 to 29.02.2004. The Commissioner found that the commercial invoices showed recovery of amounts other than the charges for transportation of goods. As regards the transportation charges such as Barge, Wharfage charges, delivery charges, actuals of which are admissible for deduction, the assessee had failed to furnish the relevant figures. Accordingly, it was held that an amount of Rs.6, 09,691/- was short paid by the assessee. The demand was confirmed adjudicating the notice issued invoking the larger period.

Appellant’s Contentions:- Appellant submitted that being a public sector undertaking they did not make any undue gain by evading duty due to the exchequer. The demand could not have been validly confirmed by the Commissioner in the absence of a finding of fraud, collusion, willful mis-statement of facts etc. The show cause notice was issued without arriving at a correct finding as to the nature of excess collection alleged against the appellant. The clearances of petroleum products by the appellants were governed by the pricing circulars issued periodically by their Headquarters and followed by different installations. The amounts found to have been collected in excess represented delivery charges/wharfage etc. entitled for exclusion from the assessable value under Rule 5 of the Central Excise (Determination of Price of Excisable Goods) Valuation Rules, 2000.

Appellant submits that they had failed to avail the opportunity to properly explain their case before the Adjudicating Authority. They submitted that given an opportunity, they would explain the nature of the amounts realized on the impugned clearances and that no excise duty was payable on such amounts found to have been collected by them. There was no suppression of facts on their part.

Reasoning of Judgment:- The Tribunal perused the order of the Commissioner wherein it was found that during the material period the appellant collected various higher cum-duty amounts under commercial invoices compared to the Central Excise invoices. It was found that the appellant had collected excess amount including other charges. The appellants had not furnished the details of transportation charges admissible as abatement in terms of Rule 5 of Central Excise Valuation Rules. Considering the submissions by the appellants that the excess amounts represented amounts admissible as abatement under Rule 5 of the Central Excise Valuation Rules and that they were not able to present their case properly before the Adjudicating Authority, the Tribunal remand the matter for fresh adjudication by the Commissioner.

Decision:- Appeal allowed by way of remand.

Comments:- The principle of natural justice requires that the party should be heard and represented before deciding the case. But in instant case, the party was not able to present their case properly. Hence the tribunal rightly remanded the case to original adjudication authority.

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PJ/Case Laws/2010-11/1086

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