Case Law Details
Indo Unique Flame Limited Vs Commissioner of Central Excise & Service Tax (CESTAT Mumbai)
The Adjudicating Authority has proceeded to determine tax liability under section 73 of Finance Act, 1994, along with appropriate interest under section 75 of Finance Act, 1994, and impose penalties under section 77 and 78 of Finance Act, 1994 without the preliminary requisite of affording them a hearing or even awaiting their response to show cause notice.
CESTAT held that We fail to perceive any justification for the peremptoriness of the adjudicating authority in foreclosing grant of opportunity to reply to the notice which would serve in disposal of the proceedings in a fair and judicious manner. On the contrary, he seems to have taken elaborate pains to controvert the essentiality of compliance with principles of natural justice. The haste, so demonstrated, is unseemly. We do not propose to dilate further on the inappropriateness of proceeding to adjudication without the benefit of some response from the noticee.
For that reason, CESTAT set aside the impugned order and remand the matter back to the original authority for fresh adjudication after placing the appellant-noticee on notice of intent to take up, and complete, the adjudication process.
FULL TEXT OF THE CESTAT MUMBAI ORDER
The limited issue for consideration in this appeal of M/s Indo Unique Flame Limited is that order-in-original no. 31/ST/NGP-II/2015 dated 30th September 2015 of Commissioner of Central Excise & Customs, Nagpur – II Commissionerate has proceeded to determine tax liability of Rs. 1,13,21,769/- under section 73 of Finance Act, 1994, along with appropriate interest under section 75 of Finance Act, 1994, and impose penalties under section 77 and 78 of Finance Act, 1994 without the preliminary requisite of affording them a hearing or even awaiting their response to show cause notice dated 14th October 2014.
2. Learned Counsel, while admitting that the notice had not been responded to, does contend that facts of the case and applicability of law thereto renders it impossible to arrive at a fair conclusion without considering alternative possibilities which the impugned order has not delved into.
3. It was pointed out by her that the adjudicating authority had, after taking note of delivery of the speed post article purportedly containing the notice on 20th October 2014 and recording the want of a written reply specifying desire to be heard in person, proceeded to issue the impugned order under the authority of section 33A of Central Excise Act, 1944 as made applicable to Finance Act, 1994.
4. Learned Authorised Representative submits that it is the responsibility of the noticee to respond in accordance with law and that this aspect, as mandated by section 33A of Central Excise Act, 1944, has been clearly brought out in the impugned order with the cavil of the appellant herein being devoid of merit.
5. We find that the impugned order has placed reliance on the decision of the Hon’ble Supreme Court in Jethmal v. Union of India [1999 (110) ELT 379 (SC)] and the decision of the Tribunal in Patel Widecom India Ltd v. Commissioner of Customs(ICD), TKD, New Delhi [2004 (170) ELT 16 (Tri.-Del.)]. In re Jethmal the issue arises from Sea Customs Act, 1878 which did not have a specific provision for issue of notice as exists in the present statute. The decision of the Tribunal in re Patel Widecom India Ltd arose from the refusal of the noticee to receive the show cause notice and is not in conformity with the circumstances in the impugned dispute.
6. We fail to perceive any justification for the peremptoriness of the adjudicating authority in foreclosing grant of opportunity to reply to the notice which would serve in disposal of the proceedings in a fair and judicious manner. On the contrary, he seems to have taken elaborate pains to controvert the essentiality of compliance with principles of natural justice. The haste, so demonstrated, is unseemly. We do not propose to dilate further on the inappropriateness of proceeding to adjudication without the benefit of some response from the noticee.
7. For that reason, we set aside the impugned order and remand the matter back to the original authority for fresh adjudication after placing the appellant-noticee on notice of intent to take up, and complete, the adjudication process.
(Order pronounced in the open court on 7th April 2022)
