2021 (1) TMI 752 - AT - Central Excise

Appeals remanded due to procedural violations, emphasizing fair hearing and access to documents.

M/s. Rashmi Metaliks Limited, Unit-I Versus Commissioner of CGST & CX, Haldia Commissionerate and Others

M/s. Rashmi Metaliks Limited, Unit-I Versus Commissioner of CGST & CX, Haldia Commissionerate and Others - TMI Issues Involved:1. Alleged evasion of central excise duty by suppression of facts and clandestine removal of goods.2. Non-return of non-relied upon documents to the appellants.3. Violation of principles of natural justice.4. Adequacy of the opportunity given to appellants for personal hearing and submission of replies.5. Validity of the ex-parte order passed by the Commissioner.Detailed Analysis:1. Alleged Evasion of Central Excise Duty:The case involves a group of companies engaged in manufacturing various goods, accused of evading central excise duty by suppressing facts and clandestinely removing finished excisable goods without paying the duty, and undervaluing such goods during 2011-12 and 2012-13. The DGCEI conducted searches and seized several documents, proposing recovery of Rs. 67,28,17,794/- as unpaid duty along with interest and penalties under Sections 11A(4) and 11AA of the Act.2. Non-return of Non-relied Upon Documents:The appellants contended that non-relied upon documents were not supplied within the stipulated time, violating Rule 24A of Central Excise Rules, 2002. They argued that the delay in receiving these documents hindered their ability to prepare a comprehensive reply to the show cause notice. Despite multiple requests and partial returns of documents, the appellants claimed they did not receive all necessary documents, which was crucial for their defense.3. Violation of Principles of Natural Justice:The appellants argued that the Commissioner’s actions violated the principles of natural justice by proceeding with hearings and passing the order without ensuring that all non-relied upon documents were returned. This, they claimed, deprived them of a fair opportunity to present their case. They cited several judicial precedents and CBEC circulars emphasizing the necessity of returning non-relied upon documents to uphold natural justice.4. Adequacy of Opportunity for Personal Hearing and Submission of Replies:The appellants were given multiple dates for personal hearings, but they argued that these were scheduled without ensuring the return of all non-relied upon documents. They maintained that they needed sufficient time to prepare their replies after receiving the documents. The Commissioner’s insistence on proceeding with the hearings despite incomplete document returns was seen as an attempt to rush the adjudication process.5. Validity of the Ex-parte Order:The Commissioner proceeded ex-parte, citing non-cooperation and delay tactics by the appellants. However, the Tribunal found that the appellants were not given adequate time and necessary documents to prepare their defense, thus violating natural justice principles. The Tribunal emphasized that the department should have ensured the return of documents and provided reasonable time for the appellants to respond.Tribunal's Decision:The Tribunal concluded that the principles of natural justice were violated due to the non-return of documents and insufficient time given to the appellants to prepare their defense. The Tribunal found that the defects in the adjudication process were curable and remanded the case back to the adjudicating authority for de novo consideration. The adjudicating authority was directed to provide the requested documents within four weeks, allow the appellants eight weeks to submit their replies, and complete the adjudication within eight weeks thereafter. The appellants were instructed to cooperate and avoid unnecessary delays.Conclusion:The appeals were allowed by way of remand, emphasizing the need for adherence to natural justice principles and proper procedural conduct in adjudication proceedings. The case underscores the importance of providing all necessary documents and reasonable time to the parties involved to ensure a fair hearing and decision.