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of <h1>Tribunal upholds duty demand & penalty for 1999-2000, sets aside orders for 2000-01 & 2001-02.</h1> <h3>Stern Leather Exports Versus CCE, Kanpur. </h3> Stern Leather Exports Versus CCE, Kanpur. - TMI Issues Involved:1. Duty liability for the financial year 1999-2000.2. Duty liability for the financial years 2000-01 and 2001-02.3. Compliance with principles of natural justice in adjudication.Detailed Analysis of the Judgment:1. Duty Liability for the Financial Year 1999-2000:The appellant, a manufacturer of leather shoes, claimed eligibility for duty exemption under SSI notification No.8/99/CE. The Department found that the appellant's sales for 1999-2000 were Rs.1,12,03,424/-, exceeding the exemption limit of Rs.50 lakhs. The appellant contended that only Rs.31,95,792/- worth of goods were manufactured by them, and the remaining Rs.80,07,632/- worth of goods were purchased from M/s Jyoti Leather Works and M/s MS Enterprises. However, investigations revealed that these entities were non-existent at the provided addresses, leading to the conclusion that the appellant had manufactured the entire quantity. Consequently, a duty demand of Rs.4,50,362/- was confirmed, along with an equal penalty under Section 11AC of the Central Excise Act, 1944. The Tribunal upheld this duty demand and penalty, stating, 'the only conclusion which can be drawn is that the goods claimed to have been purchased from M/s MS Enterprises and M/s Jyoti Leather Works had actually been manufactured by the appellant.'2. Duty Liability for the Financial Years 2000-01 and 2001-02:The appellant claimed that their clearances for 2000-01 and 2001-02 were within the exemption limit, and the excess goods were purchased from M/s Super Flexo Leather Footwear and M/s Jauhar Saddle Industries. However, the Department noted sales worth Rs.1,08,40,256/- for 2000-01 and Rs.1,25,99,136/- for 2001-02, exceeding the exemption limit. The adjudicating authority did not consider the appellant's submissions or allow cross-examination of witnesses. The Tribunal found that the adjudication order was passed ex-parte without considering the appellant's defense, violating principles of natural justice. The Tribunal stated, 'the impugned order is not sustainable' and remanded the matter for de-novo adjudication after granting an opportunity for personal hearing and considering the appellant's submissions.3. Compliance with Principles of Natural Justice in Adjudication:The Tribunal noted procedural lapses in the adjudication process for the years 2000-01 and 2001-02. The appellant's request for adjournment was ignored, and the adjudicating authority passed an ex-parte order without considering the appellant's reply to the Show Cause Notice. The Tribunal emphasized the importance of adhering to principles of natural justice, stating, 'Since there is violation of the principles of natural justice, the impugned order is not sustainable.' The matter was remanded for de-novo adjudication, ensuring that the appellant is granted a personal hearing and their submissions are duly considered.Conclusion:The Tribunal dismissed the appeal for 1999-2000, upholding the duty demand and penalty. For the years 2000-01 and 2001-02, the Tribunal set aside the impugned order and remanded the matter for de-novo adjudication, emphasizing the need for compliance with principles of natural justice.
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