2018 (1) TMI 45 - AT - Central Excise

Tribunal overturns denial of SSI exemption, stresses natural justice

Usha Thermosets P. Ltd., Uniband Industries, Unisets Industries, Unique Resins Industries Versus C.C.E. & S. Tax, Daman

The Tribunal set aside the Order-in-Original that denied SSI exemption and imposed penalties on the Appellants. The Appeals were allowed due to a lack of ... SSI Exemption - N/N. 175/86-CE dated 1.3.1986 - Held that: - it has been categorically admitted that the aforesaid four units are not separate entities, but functioning as one and the same, therefore, value of clearances of excisable goods of each unit is to be clubbed with clearance value of M/s Usha Thermosets Pvt. Ltd. so as to determine the eligibility of exemption under the N/N. 176/86-Central Excise during the relevant period. It cannot be denied that observation of principle of natural justice is fundamental for delivery of justice which not only includes opportunity of personal hearing but supply of statements and other documentary evidences so as to enable the person against whom charges are leveled to rebut the said charges. Even though, during the course of hearing the adjudication file was placed where the statements are stated to be not available, however, in the impugned order no categorical finding about non-availability of such statements has been recorded - the statements are not available or witnesses cannot be produced, the adjudicating authority may proceed to decide the case. Appeal allowed by way of remand. Issues:Appeal against Order-in-Original regarding denial of SSI exemption and imposition of penalty. Preliminary objection raised on violation of natural justice principles - supply of relied upon documents and cross-examination. Discrepancy between Appellants and Revenue on the requirement of supplying statements and cross-examination. Request for decision based on extracts of statements. Applicability of a judgment by the Hon'ble Gujarat High Court. Adjudicating authority's observations on denial of SSI exemption based on statements of individuals. Commissioner's stance on non-supply of statements and cross-examination. Tribunal's analysis of the situation and decision to set aside the impugned order.Analysis:The case involved four Appeals challenging an Order-in-Original that confirmed a demand and imposed penalties on the Appellants for allegedly availing SSI exemption through fragmentation. The Appellants contended a violation of natural justice principles due to the lack of supplied documents and cross-examination. The Advocate cited judgments emphasizing the importance of these rights. However, the Revenue argued that the Appellants had not raised these issues earlier, suggesting an attempt to delay proceedings. The Commissioner supported this stance, stating that the Tribunal had not directed the supply of statements or cross-examination. The Revenue proposed deciding based on extracts of statements, citing a relevant judgment.The Appellants disagreed, stating the cited judgment did not apply to their case. The Tribunal reviewed the arguments and records, noting the Commissioner's reliance on statements to deny SSI exemption. Despite the unavailability of statements in the adjudication file, the Tribunal found no explicit confirmation of their absence in the impugned order. Consequently, the Tribunal ordered the supply of requested statements and allowed cross-examination. If statements were unavailable, the adjudicating authority was instructed to proceed based on legal principles. Ultimately, the impugned order was set aside, and the Appeals were allowed by way of remand, emphasizing the importance of upholding natural justice principles in the proceedings.