Sustainability of demand when relied upon documents not provided to assessee

PJ/Case Laws/2012-13/1036

Case: Commissioner of Central Excise, Ludhiana v/s Gulab Industries (P) Ltd.

Citation: 2010 (262) E.L.T. 780 (Tri-Del)

Issue:- Demand of duty for clandestine removal and duty liability – whether sustainable when Department did not provide copies of relied upon documents to the assessee?

Brief Facts:- This appeal arises from order dated 30-12-2004 passed by the Commissioner (Appeals) whereby the appeal filed by the Department, against the order of the adjudicating authority for failure on the part of the adjudicating authority to impose penalty, has been dismissed while the appeal filed by the assessee against the order of the adjudicating authority confirming the demand has been allowed. The net result of the impugned order is that the proceedings which were sought to be initiated against the respondents on allegation of clandestine removal of the goods with the intention to evade duty has been quashed.

The adjudicating authority vide its order dated 3-6-2004 confirmed the demand of duty to the tune of Rs. 12,00,481/- against the respondents herein along with interest thereon, besides imposing penalty on the dealers. The proceedings in that regard proceeded ex parte. The said order was sought to be challenged by the assessee-respondent herein mainly on the ground that despite repeated requests for copies of the relied upon documents, the same were not furnished to the respondents and the matter had proceeded ex parte. The contention in that regard was accepted by the Commissioner (Appeals) and further observing that even though opportunity was given to the department to furnish the copies of the documents at the appellate stage, the same were not furnished. In those circumstances, the appeal was allowed and the order passed by the lower authority was quashed. Simultaneously, the appeal filed by the Department making grievance about the non-imposition of penalty against the respondents was also dismissed.

Appellant’s Contention:- Revenue submitted that even assuming that copies were not made available to the respondents before the disposal of the matter, the Commissioner (Appeals) could not have quashed the proceedings and could have given proper opportunity to the Department to furnish the copies of documents and for that purpose could have remanded the matter. According to learned DR the department has very good case on merits and, therefore, opportunity should be given to the department in the interest of revenue

Respondent’s Contention:- Respondents submitted that the Commissioner (Appeals) had no jurisdiction to remand the matter and that therefore he gave opportunity to the Department to furnish the copies of documents to the respondents by issuing direction in that regard, under letter dated 17-12-2004. Yet the Department failed to furnish the copies of documents to the respondents. In those circumstances, no fault can be found with the order of the Commissioner (Appeals) quashing the proceedings. Learned DR further submitted that there was no sufficient time granted to furnish the copies of documents. The letter was issued on 17-12-2004 and impugned order was passed on 30-12-2004.

Reasoning of Judgment:- The show cause notice was issued to the respondents, the relied upon documents were not furnished to the respondents along with the show cause notice and pursuant to the service of show cause notice, the respondents demanded the copies of those documents. Though it is the case of the appellant that pursuant to such demand, the respondents were directed to collect the copies of the documents from the preventive branch on any working day and that they failed to do so, neither the order passed by the adjudicating authority nor the memo of appeal before the Tribunal discloses the dates of the alleged letters or the communications stated to have been sent by the department directing the respondents to collect such documents. The impugned order discloses that on 17-12-2004 while the matter was pending at the lower appellate stage, there was direction to the Department to furnish the copies of the documents and statements recorded by the Department to the respondents by 24-12-2004. Undisputedly, no such copies of documents were ever furnished. Learned DR has made grievance about lack of time in that regard and that very short time was granted to do the needful. However, the records do not support the contention. The records nowhere disclose that department had any time made any grievance about shortage of time or any efforts were made to seek extension of time from the Commissioner (Appeals) to furnish the copies of documents to the respondents. What is pertinent to note here that even in the course of the filing of the appeal, the department could have furnished the copies of such documents along with memo of appeal to the respondents. There is no explanation forthcoming for failure on the part of the Department to do so. Even today we have not been able to peruse the copies of such documents. In order to show the bona fide on the part of the Department in that regard, it was expected from the Department not only to furnish the copies of such documents to the respondents but also to place the copies thereof on record before us in the present appeal proceedings. Failure in that regard discloses lack of bona fide on the part of the appellants. Once it is clear that the respondents were sought to be issued show cause notice without furnishing copies of relied upon documents and even the efforts were made on the part of the respondents to get the same did not yield any fruitful result and even today the copies of the documents are not made available to the respondents, we do not find any case for interference in the impugned order.

Decision:- Appeals dismissed.

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PJ/Case Laws/2012-13/1036

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