2006 (6) TMI 272 - AT - Central Excise

Appellants granted reply opportunity, set aside order for de novo adjudication.

ERODE RANA TEXTILE PROCESSORS (P) LTD. Versus COMMISSIONER OF C. EX., SALEM

The appeals were allowed, granting the appellants a last opportunity to file a reply to the show cause notice and subject themselves to the adjudicatory ... Natural justice - Cross examination - When deniable Issues:- Appeal against an ex parte order by the Commissioner of Central Excise.- Denial of opportunity for cross-examination leading to a claim of breach of natural justice.- Consideration of whether the appellants should be given a last opportunity to file a reply to the show cause notice.Analysis:1. Appeal against Ex Parte Order:The appeals were made against an order by the Commissioner of Central Excise, which confirmed a demand of duty and imposed penalties on the appellants ex parte. The demand was based on the alleged clandestine removal of processed fabrics by the appellants to garment manufacturers. The appellants did not reply to the show cause notice despite several opportunities. The Commissioner allowed cross-examination of some witnesses but declined permission for others, leading to a claim of denial of natural justice by the appellants.2. Denial of Opportunity for Cross-Examination:The appellants argued that the denial of the opportunity to cross-examine all witnesses who gave statements against them under Section 14 of the Central Excise Act amounted to a breach of natural justice. However, the Tribunal found that since the appellants did not reply to the show cause notice denying the allegations, there was no dispute to be adjudicated upon. The Tribunal held that cross-examination should only be allowed after the appellants deny the allegations through a reply to the notice.3. Last Opportunity to File Reply:Despite the above findings, the Tribunal, in the interest of justice, granted the appellants a last opportunity to file a reply to the show cause notice and subject themselves to the adjudicatory jurisdiction of the Commissioner. The impugned order was set aside, and the appellants were directed to file their reply within 30 days. The adjudicating authority was instructed to conduct a de novo adjudication within 30 days thereafter, ensuring a speaking order in accordance with the law and principles of natural justice. The appellants were also granted the opportunity to adduce evidence and be heard personally.In conclusion, the appeals were allowed by way of remand, providing the appellants with a final chance to present their case and respond to the allegations before the adjudicating authority.