2018 (3) TMI 1376 - AT - Central Excise

Tribunal overturns duty demand due to procedural fairness, emphasizes natural justice principles

The Tribunal set aside the Central Excise duty demand of Rs. 20,07,084 due to alleged undervaluation of goods, citing lack of adequate opportunity for ... Principles of Natural Justice - Clandestine Removal - the adjudicating authority, in this case, has passed the ex-parte order in confirming the duty demand on the appellant - Held that: - Since the appellant at this juncture, submits that it has adequate documents/records to demonstrate that appropriate duty liability has been discharged and the goods were not clandestinely removed from the factory, then, as per the principles of natural justice, one more opportunity should be granted to the appellant to produce the documents before the original authority - appeal allowed by way of remand. Issues:- Central Excise duty demand based on alleged undervaluation of goods- Adequate opportunity of personal hearing not granted- Allegation of clandestine removal of goods- Principles of natural justice in adjudication processCentral Excise Duty Demand:The appeals were against an order confirming a Central Excise duty demand of Rs. 20,07,084 on the grounds of undervaluation of finished goods. The appellant had shown a lower value in their ER-I return compared to the audited balance sheet for the same period. The differential duty was calculated, resulting in the duty demand. The appellant contested the charges, claiming they had not clandestinely removed goods and were willing to provide evidence to support their case.Adequate Opportunity of Personal Hearing:The appellant argued that the adjudicating authority had not granted them adequate opportunity for personal hearing before passing the order. This lack of opportunity was highlighted as a procedural flaw that affected the validity of the duty demand based on alleged undervaluation. The appellant sought a chance to present documents and records to refute the allegations.Allegation of Clandestine Removal of Goods:The Department had alleged that the appellant engaged in clandestine removal of goods, leading to the duty demand. The appellant refuted these allegations and requested a remand to the original authority to provide evidence demonstrating that the appropriate duty liability had been discharged and no clandestine removal had occurred. The Tribunal acknowledged the appellant's right to present evidence and granted a remand for fresh adjudication based on the documents to be submitted.Principles of Natural Justice in Adjudication Process:The Tribunal, considering the principles of natural justice, set aside the impugned order and remanded the matter to the original authority. This decision was based on the appellant's claim of having documents to prove compliance with duty liability requirements. By allowing the appellant another opportunity to present evidence, the Tribunal upheld the importance of fair procedural practices in the adjudication process. The appeals were allowed by way of remand to ensure a just and thorough examination of the case.