Whether Order passed ex parte by the commissioner without giving any findings for not granting adjournment justifiable?

PJ/Case Laws/2012-13/1336

Case:- M/s Bindal Sponge LTD Vs Commissioner Of Central Excise Customs And Service Tax, Bhubaneswar-I

Citation:- 2012-TIOL-1751-CESTAT-KOL

Brief Facts:-Appellant are engaged in the manufacture of Sponge Iron, M. S. Ingots and Runner Riser falling under Chapter Heading No.72 of the Central Excise Tariff Act, 1985. Appellant was also availing CENVAT Credit on Capital Goods, Inputs and Input Service. Proceedings were initiated against them on the grounds that on nine occasions, they paid the duty by availing Cenvat Credit prematurely. Accordingly, Department has issued show cause notice for demand of duty amounting to Rs. 1,31,35,915/- along with a penalty under Rule 15 of the CENVAT Credit Rules, 2004 read with Section 11AC of the Central Excise Act, 1944. Commissioner has confirmed the proposal in the Demand cum-Show Cause Notice against the Appellant. Appellant had been afforded personal hearing to appear before the lower adjudicating authority consecutively on 7.12.2009, 8.12.2009, 10.12.2009 and 11.12.2009 by a single correspondence for which they seek adjournment but the order was passed ex parte without considering the appellant’s request. Appellant filed appeal against Order-in-Original before Tribunal.

Appellant Contentions:-Appellant submits that the issue has been decided without giving them an effective hearing by denying them the principle of natural justice. Appellant contended that they made a request for adjournment since their authorized signatory who was dealing with Central Excise matters, was on leave. Appellant further submitted a letter to that effect, seeking adjournment on 11.12.2009, which was duly acknowledged on the same day, however the impugned Order was passed on 18.12.2009 ex parte in utter disregard to their letter. Appellant contended that he had paid the total duty along with interest and they are now paying the duty regularly. Appellant further submits that the contention is that the only allegation against them was that they had availed the Credit of Duty prematurely, and the Commissioner had decided their case ex parte, without granting hearing and without considering the aspect that appellant had paid the total duty involved in this case along with interest due, on delay in payment of duty and imposed an equal amount of penalty. This is nothing but a grave breach of principle of natural justice. Appellant has relied on Tribunal’s decisions in the case of Meenakshi Associates(P) Ltd. vs. CCE, Noida reported in 2009 (245) ELT 362 (Tri.-Del.) and the case of Jindal Waterways Ltd. vs. CC(Export) reported in 2009 (247) ELT 715 (Tri.-Mumbai).

Respondent Contentions:-Respondent reiterates that the findings of the learned Commissioner.

Reasoning of Judgment:-The Tribunal has perused the submissions made by both sides. Tribunal finds thata single notice of personal hearing issued on four consecutive dates on 07.12.2009, 08.12,20091 10.12.2009 and 11.12.2009, appellant had approached the learned Commissioner for adjournment on the ground that the person who was dealing with the Excise matters was on leave. Tribunal finds that the commissioner has decided the case without granting hearing in breach of principal of natural justice. Tribunal finds that in this matter mere failure of the learned Advocate to appear on 14-10-08 could not be a reason to proceed ex-parte. Besides on 11-12-09 an application was moved by the learned Advocate for postponement of hearing which was also acknowledged and is also a matter on record. Being so one fails to understand as to what prevented the authority from affording one more opportunity to the appellants of being heard in the matter. Viewed from this angle we find that the grievance of the appellants about failure on the part of the authority to comply with principles of natural justice is well justified. Tribunal also find that the appellant had requested for adjournment of the personal hearing afforded them, which was also acknowledged, however, the impugned Order was subsequently passed ex parte without giving any finding for not granting adjournment. Tribunal has accordingly allow the appeals and without expressing any opinion in relation to the merits of the case set aside the impugned order and remand the matters to Commissioner to decide afresh after hearing the parties.

Decision:- Appeal allowed by way of remand.

Comment:- This is yet another case laying the foundation that an order passed without considering the submissions made by the parties or without affording them opportunity of personal hearing is not relevant in the eyes of law on account of gross violation of the principles of natural justice.

Comments

PJ/Case Laws/2012-13/1336

Post a Comment

Query