Case Law Details
Unnati Alloys Pvt Ltd. Vs C.C.E. & S.T. (CESTAT Ahmedabad)
Shri Jitendra Singh, Learned Counsel along with Ms. Reena Rawat, Advocate appeared for the appellants and he submits that as per the impugned order there is no independent finding against the appellants and the adjudicating authority has directly imposed the penalty without giving any reasoning. Therefore, the order imposing penalty on the appellants is not sustainable. He further submits that penalty on Shri Amit Gupta was imposed solely considering him as the director of M/s. Unnati Alloys Pvt. Ltd whereas in fact Shri Amit Gupta was not the director during the relevant period. Therefore, entire basis for imposing the penalty on the appellant is demolished. In this regard he referred to the copy of master data extracted from the site of ROC. He pointed out that during the relevant time Shri Nitin Bansal and Deepak Bansal were the directors.
Therefore, the adjudicating authority imposed penalty on the appellant treating him as the director of the Unnati Alloys is not sustainable.
As regard the penalty imposed upon Shri Amit Gupta, I find that Shri Amit Gupta was treated as director of Unnati Alloys Pvt. Ltd whereas as pointed out by the learned counsel that he was not the director of M/s. Unnnati Alloys Pvt. Ltd during the relevant period. This is a very vital fact and the adjudicating authority has proceeded on a wrong footing.
As per my above discussion and finding, CESTAT set aside the impugned order to the extent of imposition of penalty on the appellants and remand the matter to the Adjudicating Authority for passing a fresh order keeping in mind the above observation.
FULL TEXT OF THE CESTAT AHMEDABAD ORDER
These appeals are directed against the impugned order passed by the Commissioner whereby the appellants were imposed penalties under Rule 26 (2) of Central Excise Rules, 2002. These penalties were imposed in connection with fraudulent passing/ availment of cenvat credit by M/s Chandra Proteco Ltd.
2. Shri Jitendra Singh, Learned Counsel along with Ms. Reena Rawat, Advocate appeared for the appellants and he submits that as per the impugned order there is no independent finding against the appellants and the adjudicating authority has directly imposed the penalty without giving any reasoning. Therefore, the order imposing penalty on the appellants is not sustainable. He further submits that penalty on Shri Amit Gupta was imposed solely considering him as the director of M/s. Unnati Alloys Pvt. Ltd whereas in fact Shri Amit Gupta was not the director during the relevant period. Therefore, entire basis for imposing the penalty on the appellant is demolished. In this regard he referred to the copy of master data extracted from the site of ROC. He pointed out that during the relevant time Shri Nitin Bansal and Deepak Bansal were the directors.
Therefore, the adjudicating authority imposed penalty on the appellant treating him as the director of the Unnati Alloys is not sustainable. He reiterates the ground of the appeal and placed reliance on the following judgments:-
- Agarwal Metal Works Vs. Commissioner , CGST, Alwar- CESTAT Final Order No. 52089-93/2021 dated 22.12.2021
- Arya Alloys- CESTAT Final Order No. 50434-37/2020 dated 02.03.2020
- Multimedia Ltd Vs. CCE. Udaipur- CESTAT Final Order No. – A/51822/2018 dated 11.05.2018
- Commissioner of Central Excise & Service Tax Vs. Juhi Alloys Ltd – 2014 (302) ELT 487 (All.)
3. Shri Vijay G. Iyengar, learned Assistant Commissioner (AR) appearing on behalf of the Revenue reiterates the finding of the impugned order.
4. I have carefully considered the submission made by both sides and perused the records. The record of personal hearing appearing in the impugned order is reproduced below:-
“6.1. Personal Hearing in the matter was fixed on various occasions Le 15.03.2017, 22.03.2017, 25.04.2017, 27.04.2017, 03.05.2017, 28.06.2017 & 08.08.2017. Shri B. Mohan, Consultant & Shri on 08.03.2017, R. Krishnan, Consultant appeared on 08.08.2017 for personal hearing behalf of the noticee company M/s CPL-I. They handed over their written, on submission dated 08.08.2017 at the time of personal hearing. They requested time upto 8th September 2017 to submit the remaining documents and to make their final submission. They stated that do not wish to have any further hearing in the matter. Time was granted upto 8 September 2017 to submit the documents and to make their final submission. No other noticee or any of the representatives appered for personal hearing at the fixed date.
6.2. In the instant case, the opportunity for personal hearing was granted to the other noticees as many as 8 times as mentioned above. However they have chosen not to avail it on any occasion.”
4.1 It is further observed that the appellant have in the grounds of the appeal made the ground on the principle of natural justice which is reproduced below:-
“B. Because the order is vitiated by non-application of mind as the learned Principal Commissioner has failed to apply his independent mind to the vital facts of the case and law attendant thereto and imposed a penalty on the present Appellant towing the line of the Show Cause Notice without appreciating their role in proper perspective and without appreciating the evidences on record.
C. Because the learned Principal Commissioner has gravely erred in confirming guilt against the present Appellant contrary to principles of natural justice as no Show Cause Notice was ever served to the Appellant, no opportunity of cross examination of persons whose statements have been relied was ever granted to the Appellant and no personal hearing before adjudication was ever granted to the Appellant. It is respectfully submitted that learned Respondent has not made any efforts to even serve Show Cause Notice to the Appellant during the course of adjudication and hence the impugned Order is liable to be set aside on this short ground alone.
D. Because learned Respondent failed to appreciate that any Order passed without an opportunity of personal hearing is vitiated and bad in law. Though it has been mentioned in the Order that several opportunities for personal hearing were granted to the Appellant, but as earlier stated, the Appellant never received any communication from the Department regarding the instant case and therefore it cannot be said that sufficient opportunity was granted to the Appellant to explain their case. Kind attention in this regard is invited to the judgment rendered by the Hon’ble Supreme Court in the matter of Tulsi Ram Patel as reported in AIR 1985(SC)1416 wherein Your Lordship held that a person against whom an order to his prejudice may be passed should be informed of the allegations and charges against him.”
From the above it is clear that the appellant could not represent their case before the Adjudicating Authority. Therefore there is a clear violation of the principles of natural justice. It is also observed that the Adjudicating Authority in the impugned order has not given any specific finding for imposition of penalty on the appellants. Therefore, the impugned order is not a speaking order.
4.2 As regard the penalty imposed upon Shri Amit Gupta, I find that Shri Amit Gupta was treated as director of Unnati Alloys Pvt. Ltd whereas as pointed out by the learned counsel that he was not the director of M/s. Unnnati Alloys Pvt. Ltd during the relevant period. This is a very vital fact and the adjudicating authority has proceeded on a wrong footing.
4.3 As per my above discussion and finding, I set aside the impugned order to the extent of imposition of penalty on the appellants and remand the matter to the Adjudicating Authority for passing a fresh order keeping in mind the above observation.
5. The appeals are allowed by way of remand to the Adjudicating Authority.
(Pronounced in the open court on 07.03.2023 )
