2018 (7) TMI 1356 - AT - Central Excise

Tribunal Overturns Authority's Errors, Emphasizes Procedural Fairness in Tax Matter

The Tribunal found that the Lower Appellate Authority erred by not providing notice or a personal hearing to the appellants, leading to a blanket order ... Recovery of Refund granted earlier against CENVAT Credit - retrospective amendment - scope of Clause 145(1) Finance Bill 2003 - Held that:- The Revenue ventured to raise a demand beyond 22.12.2002 that must be paid within 30 days of the assent of the President to the Finance Bill failing which interest @ 15% per annum would be levied - The Revenue has acted with bias in exceeding the scope of Clause 145(1) Finance Bill 2003 by making an illegal demand of recovery of Central Credit till 28.02.2003 instead of 22.12.2002 and failing to consider that the Cenvat Credit availed of in the manufacture and removal of goods have already been duly utilized and refunds made accordingly - appeal is liable to be allowed. Appeal allowed - decided in favor of appellant. Issues:1. Lack of notice and personal hearing by Lower Appellate Authority.2. Calculation errors in demands made by the Original Authority.3. Legality of demands raised beyond the scope of the Finance Bill 2003.Issue 1: Lack of notice and personal hearing by Lower Appellate AuthorityThe Tribunal found that the Lower Appellate Authority had passed orders without giving notice or granting a personal hearing to the appellants. The Authority did not consider submissions made by the appellants regarding the amounts demanded not corresponding to unutilized credit. As a result, a blanket order was passed without looking into the details of each case. The Tribunal, in the absence of a stay on the decision of the Guwahati High Court, directed a fresh decision by the Original Authority, affording a reasonable opportunity of hearing to the appellants for proper calculation under the retrospectively amended law upheld by the High Court.Issue 2: Calculation errors in demands made by the Original AuthorityIn the denovo adjudication, the Original Authority ordered M/s. Hunwal Tea Estate to pay a specific amount under the Finance Act 2003. The Commissioner (Appeals) upheld this order, leading to the present appeal. The appellant, a tea manufacturer availing exemptions, challenged the demand for CENVAT Credit beyond the specified period in the Finance Bill 2003. The appellant argued that the demand exceeded the jurisdiction granted by the Bill and that the credit utilized for goods' manufacture had already been refunded. The Tribunal examined the calculations and found discrepancies, setting aside the impugned order and allowing the appeal with consequential relief.Issue 3: Legality of demands raised beyond the scope of the Finance Bill 2003The appellant contended that the Revenue exceeded its jurisdiction by demanding payment beyond the period stipulated in the Finance Bill 2003. The demand for recovery of CENVAT Credit till 28.02.2003 was challenged as illegal and arbitrary, as it extended beyond the scope of the exemption notification. The Tribunal reviewed the appellant's arguments, including detailed calculations, and concluded that the demand was indeed beyond the specified period, leading to the setting aside of the impugned order and allowing the appeal with consequential relief.This judgment highlights the importance of procedural fairness, correct application of laws, and adherence to specified periods in tax-related matters, ensuring that demands are made within legal bounds and calculations are accurate.