IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
EAST ZONAL BENCH, KOLKATA

Service Tax Appeal No.ST/A/15/2010

Arising out of Order-in-Original No.CCE/BBSR-I/38/2009 Dated: 18.12.2009
Passed by the Commissioner of Central Excise, Customs & Service Tax, Bhubaneswar-I

Date of Decision: 27.8.2012

M/s BINDAL SPONGE LTD

Vs

COMMISSIONER OF CENTRAL EXCISE
CUSTOMS AND SERVICE TAX, BHUBANESWAR-I

Appellant Rep by: Shri P R Mullick, Adv.
Respondent Rep by: Shri S Misra, AR(Addl. Commr)

CORAM: S K Gaule, Member (T)
D M Misra, Member (J)

S. 33A of CEA, 1944 - Appellant had been afforded a personal hearing to appear before the lower Adjudicating Authority consecutively on 07.12.2009, 08.12.2009, 10.12.2009 and 11.12.2009 by a single correspondence - vide their letter dated 11.02.2009, which was also acknowledged, they had sought an adjournment, however, the Order was subsequently passed ex-parte by the Commissioner without giving any finding for not granting adjournment and without granting the Appellant an effective hearing in breach of principle of natural justice – Appeal allowed by way of remand: CESTAT [para 6.2]

ORDER NO.A-646/KOL/2012

Per: S K Gaule:

Heard both sides.

2. The Appellant filed this Appeal against the Order-in-Original No.CCE/BBSR-I/38/2009 dated 18.12.2009, whereby the learned Commissioner has confirmed the proposal in the Demand-cum-Show Cause Notice against the Appellant.

3. Briefly stated facts of the case are that the Appellant are engaged in the manufacture of excisable products namely, Sponge Iron, M.S.Ingots and Runner Riser falling under Chapter Heading No.72 of the Central Excise Tariff Act, 1985. They were also availing CENVAT Credit on Capital Goods, Inputs and Input Service. Proceedings were initiated against them on the ground that on nine occasions, they paid the duty by availing the CENVAT Credit prematurely. Accordingly, a Show Cause Notice was issued to them with a proposal for demand of duty of Rs.1,31,35,915/- along with a proposal for imposition of penalty under Rule 15 of the CENVAT Credit Rules, 2004 read with Section 11AC of the Central Excise Act, 1944. Learned Commissioner confirmed the proposals. Being aggrieved by the same, the Appellant are in appeal.

4. Learned Advocate appearing for the Appellant submitted that the issue has been decided without giving them an effective hearing by denying them the principle of natural justice. The contention is that they had been afforded a personal hearing to appear before the lower Adjudicating Authority consecutively on 07.12.2009, 08.12.2009, 10.12.2009 and 11.12.2009 by a single correspondence. The contention is that they made a request for adjournment since their authorized signatory who was dealing with Central Excise matters, was on leave. The Appellant 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 18.12.2000 ex parte in utter disregard to their letter. The contention is that they had paid the total duty involved in this case along with interest and they are now paying the duty regularly. The contention is that the only allegation against them was that they had availed the Credit of Duty prematurely, and the learned Commissioner decided their case ex parte, without granting them the effective hearing and without considering the aspect that they had paid the total duty involved in this case along with interest due, on delay in payment of duty, and despite that fact, the learned Commissioner confirmed the total demand of duty of Rs.1,31,35,915/- and imposed an equal amount of penalty. This is nothing but a grave breach of principle of natural justice. In their support, they placed reliance on this Tribunal's decisions in the case of Meenakshi Associates(P) Ltd; vs. CCE, Noida reported in 2009 (245) ELT 362 (Tri.-Del.) and in the case of Jindal Waterways Ltd. vs. CC(Export), Nhava Sheva reported in 2009 (247) ELT 715 (Tri.-Mumbai)

5. Learned AR appearing for the Revenue reiterated the findings of the learned Commissioner.

6. We have carefully considered the submissions and perused the record. Undisputedly, in response to a single notice of personal hearing issued on four consecutive dates on 07.12.2009, 08.12.2009, 10.12.2009 and 11.12.2009, the Appellant had approached the learned Commissioner for adjournment on the ground that the person who was dealing with the Excise matters was on leave. We find that the learned Commissioner has decided the case without granting the Applicant an effective hearing in breach of principle of natural justice. This Tribunal in the case of Meenakshi Associates (supra) at para 6 held as under:-

"6. We do not appreciate such approach of the Original Authority to issue one hearing notice for three dates, which is not in accordance with principal of natural justice. The essence of justice requires that a person who is to decide must give the parties a fair hearing before him enabling them to state their case and view. Fairness is a flexible, pragmatic and relative concept and not a rigid, ritualistic or sophisticated abstraction. In this case, the appellants have not given proper opportunity of hearing to defend the case. Accordingly, we set aside the impugned order and the matter is remanded to the Commissioner to decide afresh after granting proper opportunity of hearing. In this context, we direct the appellant to appear before the Commissioner of Central Excise on 16-2-2009 at 11.00 A.M., who will fix the date of hearing and to decide the matter expeditiously. The appeal is allowed by way of remand."

6.1. The Mumbai Tribunal in the case of Jindal Waterways Ltd.(supra) at paras 6,7,8 held as under:-

"6. In the case in hand, undoubtedly the matter was fixed for hearing on 8th October 08 as well as on 14th October, 08. In fact the date 8-10-08 was fixed on the request of the Advocate for the appellants. However, on failure of the Advocate on 8-10-08, the matter was adjourned to 14-10-08. It is pertinent to note that when earlier notice about fixing of hearing on 14-10-08 was issued, the Advocate for the appellants had informed the authority that the date of 14-10-08 was not convenient to him and therefore the matter could be preponed to 8-10-08. Being so, it was not appropriate for the concerned authority to adjourn the hearing from 8-10-08 to 14-10-08.

7. 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 13-10-08 an application was moved by the learned Advocate for postponement of hearing to 21-10-08. It is also a matter on record that the order in question was passed on 11-11-08 i.e. much after '21-10-08. 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 on 21-10-08. 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 and on this ground alone the impugned order is liable to be set aside.

8. We 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. The parties shall appear before the learned Commissioner on 6-7-09 at 11AM in order to get further date in the proceedings. It is made clear that parties are expected to give necessary cooperation to the learned Commissioner to dispose of the case at the earliest possible."

6.2. We also find that the Appellant had requested for adjournment of the personal hearing afforded them, vide their letter dated 11.02.2009, which was also acknowledged, however, the impugned Order was subsequently passed ex parte without giving any finding for not granting adjournment. In these circumstances, the case is remanded to the learned Commissioner to decide the case afresh, by granting the effective hearing to the Appellant. At this juncture, the learned Advocate appearing for the Appellant also submitted that they had already paid the total Central Excise Duty along with interest for delayed payment of duty. In these circumstances, the learned Commissioner is directed to keep the above aspect in mind while deciding the case. The Appeal is allowed by way of remand.

(Dictated and pronounced in the open court)


2009 (245) E.L.T. 362 (Tri. - Del.)

IN THE CESTAT, PRINCIPAL BENCH, NEW DELHI

S/Shri M. Veeraiyan, Member (T) and P.K. Das, Member (J)

MEENAKSHI ASSOCIATES (P) LTD.

Versus

COMMISSIONER OF C. EX., NOIDA

Final Order No. 67/2009-EX(PB), Stay Order No. 96/2009-EX(PB) and Misc. Order No. 50/2009-EX(PB), dated 19-1-2009 in Application No. E/Stay/2558/2008-EB and E/Misc./29/2009-EB in Appeal No. E/2543/2008-EB

Natural justice - Hearing - Adjournment not granted - Hearing fixed for three dates by one notice - Request for adjournment sought once but rejected - Adjournment request cannot be treated as made thrice - Issue of one hearing notice for three dates not in accordance with principles of natural justice - Proper opportunity of hearing not given - Impugned order set aside - Matter remanded to original authority for fresh decision - Section 33A of Central Excise Act, 1944. - The essence of justice requires that a person who is to decide must give the parties a fair hearing before him enabling them to state their case and view. Fairness is a flexible, pragmatic and relative concept and not a rigid, ritualistic or sophisticated abstraction. [paras 5, 6]

Case remanded

CASES CITED

Afloat Textiles Pvt. Ltd. v. Commissioner — 2007 (215). 198 (Tribunal) — Referred [Para 3]

Commissioner v. Ralson Carbon Black Ltd. — 2008 (229). 113 (Tribunal) — Referred [Para 4]

REPRESENTED BY :        S/Shri C. Hari Shankar and S. Sunil, Advocates, for the Appellant.

Shri K.K. Goel, Jt. CDR, for the Respondent.

[Order per : P.K. Das, Member (J)]. - As the issue involved in this case is in narrow compass and, therefore, the appeal is taken up for hearing after granting stay.

2. The appellants are engaged in the manufacture of Gas Cylinders, Pressure Vessels and Heat Exchangers classifiable under sub-heading Nos. 73110020 and 73090020 of the Schedule to the Central Excise Tariff Act, 1985. They were availing Cenvat credit facility. It has been alleged that the appellants failed to pay the amount of duty monthly basis by due date in violation of Rule 8 of the Central Excise Rules, 2002.

3. The main contention of the ld. Advocate is that the Commissioner granted personal hearing by Notice dated 13-08-2008 to appear on 20-8-08, 21-8-08 and 22-8-08. He also submits that the appellant by its letter dated 19-8-2008 requested for adjournment of hearing as one of the show cause notices, the review application was pending before the Settlement Commission. He relied upon the decision of the Tribunal in the case of M/s. Afloat Textiles (P) Ltd. v. CCE, Vapi reported in 2007 (215) E.L.T. 198 (Tribunal-Ahmd.). He also submits that the appellant paid the entire amount as defaulted except the amount of interest, which he undertakes to pay within the next week.

4. Ld. DR reiterates the findings of the Commissioner. He submits that the appellants are liable to pay the amount, which they have paid from their Cenvat Account, during the material period. It is a clear case of violation of Rule 8(3A) of the Rules. He relied upon the decision of the Tribunal in the case of Commissioner of Central Excise v. Ralson Carbon Black Ltd.reported in 2008 (229). 113 (T-D).

5. After hearing both the sides and on perusal of the records, we find force in the submission of the ld. Advocate that the proper opportunity of hearing was not granted to the party. It is seen from the impugned order that the hearing was fixed for three dates by one notice of hearing dated 13-8-2008 and the appellant requested for adjournment by letter dated 19-8-2008. Section 33A of Central Excise Act, 1944 provides Adjudication procedure. Proviso to Section 33A of the Act stipulates that no such adjournment shall be granted more than three times to a party during the proceeding. In the present case, we find that the appellant sought adjournment by their letter dated 19-8-2008, which cannot be treated as adjournment for three times.

6. We do not appreciate such approach of the Original Authority to issue one hearing notice for three dates, which is not in accordance with principal of natural justice. The essence of justice requires that a person who is to decide must give the parties a fair hearing before him enabling them to state their case and view. Fairness is a flexible, pragmatic and relative concept and not a rigid, ritualistic or sophisticated abstraction. In this case, the appellants have not given proper opportunity of hearing to defend the case. Accordingly, we set aside the impugned order and the matter is remanded to the Commissioner to decide afresh after granting proper opportunity of hearing. In this context, we direct the appellant to appear before the Commissioner of Central Excise on 16-2-2009 at 11.00 A.M., who will fix the date of hearing and to decide the matter expeditiously. The appeal is allowed by way of remand.

7. Misc. application is also disposed of.

(Order dictated & pronounced in open Court on 19-1-2009)

_______

 

2007 (215) E.L.T. 198 (Tri. - Ahmd.)

IN THE CESTAT, WEST ZONAL BENCH, AHMEDABAD

[COURT NO. II]

Ms. Archana Wadhwa, Member (J) and Shri M. Veeraiyan, Member (T)

AFLOAT TEXTILES (P) LTD.

Versus

COMMISSIONER OF C. EX., VAPI

Final Order Nos. A/1675-1677/2007-WZB/AHD and Stay Order Nos. S/793-795/2007-WZB/AHD, dated 4-7-2007 in Application Nos. E/S/446, 632 & 642/2007 in Appeal Nos. E/430, 631 & 635/2007

Adjudication - Natural justice - Adjournment - Multiple dates of hearings - Commissioner fixing dates on all three days of hearing as on 10-10-2006, 17-10-2006 and 31-10-2006 - Giving choice of three dates for personal hearing in one letter and seeking of adjournment by appellant by one month would not amount to the fact as the adjournments have been sought three times - Adjudicating authority’s approach not in accordance with principle of natural justice - Matter remanded for de novo decision - Section 33A of Central Excise Act, 1944.[para 2 ]

Case remanded

REPRESENTED BY :        Shri Mayur Shroff, Advocate, for the Appellant.

Shri M.M. Mathkar, JDR, for the Respondent.

[Order per : Archana Wadhwa, Member (J)]. - After dispensing with the condition of pre-deposit of duties and penalties in respect of all the applicants, we proceed to decide the appeal itself inasmuch as the impugned order was passed in violation of principle of natural justice. It is the appellant’s case that the impugned order stands passed without giving them an effective opportunity of personal hearing. It is also seen that the appellant’s defence reply was not on record in as much they had sought time to file the same on the ground that their factory was closed and company was a sick unit by BIFR proceedings. For better appreciation, we reproduce Para 34 of the impugned order :

“34. To convene the principal of natural justice, opportunities to personal hearing were given to all the Noticees on 10-10-2006, 17-10-2006 and 31-10-2006. Also they were requested to file their defence reply on or before the date of personal hearing. Ample time and opportunity was given to all the noticees to file their defence submission and to represent their case during personal hearing. M/s. Aafloat vide their letter dated 11-10-2006 requested for adjournment of hearing. The ground given by them is that the factory is closed; company is a sick unit and applied to BIFR etc. I observed that ground given by M/s. Aafloat is not sufficient. Moreover, as per proviso to Section 33A of the Central Excise Act, 1944 no such adjournment shall be granted more than three times to a party during proceedings and hence I proceed to decide the case on the basis of material available on records.”

2. We have seen letter dated 15-9-2006 issued from the office of the Commissioner fixing dates on all three days of hearing as on 10-10-2006, 17-10-2006 and 31-10-2006. The adjudicating authority has observed that in terms of proviso to Section 33A of the Central Excise Act 1944, the adjournment cannot be granted more than three times. Inasmuch as the letter of hearing mentioned three dates, he considered the appellant’s request is to be taken as the adjournment was sought three times. We are afraid that the above approach of the Commissioner is not in accordance with the right interpretation of the provisions of Section 33A. Giving choice of three dates for personal hearing in one letter and seeking of adjournment by the appellant by one month, would not amount to the fact as the adjournments have been sought three times. As such, we are of the view that the adjudicating authority’s approach is not in accordance with the principle of natural justice. The impugned orders are, accordingly set aside and appeals remanded to the adjudicating authority for de novo decision. Needless to say that the appellants would be afforded a reasonable opportunity to put forth their case before the adjudicator. The appellant undertakes to file reply to the show cause notice within one month from today and not to seek unnecessary adjournments. The adjudicating authority to decide the matter thereafter as early as possible.

3. All the stay petitions are disposed off in above manner.

(Pronounced in Court)

 
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