Court quashes ex-parte penalty, upholds natural justice, mandates show cause notice.

The court quashed the ex-parte order imposing a personal penalty on the petitioner due to the violation of principles of natural justice. The court directed the show cause notice to be served to the petitioner and granted an opportunity for a personal hearing. The court refrained from delving into the merits of the case, leaving it to be decided by the appropriate forum with both parties having the opportunity to present their cases fully.

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Issues Involved:
1. Legality and validity of the ex-parte order imposing personal penalty.
2. Non-service of show cause notice and notices of personal hearing.
3. Alleged breach of principles of natural justice.
4. Maintainability of the petition in light of alternative remedy.

Detailed Analysis:

1. Legality and Validity of the Ex-Parte Order Imposing Personal Penalty:
The petitioner challenged the legality and validity of the ex-parte order dated 28.02.2019 passed by the Principal Commissioner of Central Excise and GST, Vadodara-II, which imposed a personal penalty on the petitioner. The petitioner argued that the order was passed without the service of a show cause notice and without providing notices of personal hearing, rendering the order illegal and void ab-initio.

2. Non-Service of Show Cause Notice and Notices of Personal Hearing:
The petitioner contended that he did not receive the show cause notice issued in 2017 and that it was the responsibility of the respondent to ensure the service of the show cause notice and provide an opportunity for a personal hearing before proceeding with adjudication. The petitioner emphasized that he had left the company in June 2016 and had not received any notices until his retirement. The respondent department argued that the show cause notice was sent to the petitioner's factory and residential addresses by Speed Post, which were returned with the endorsement "left." Consequently, the show cause notice was deemed served by affixing it on the Notice Board of the DGGSSTI under Section 37C of the Central Excise Act, 1944.

3. Alleged Breach of Principles of Natural Justice:
The petitioner asserted that the imposition of a personal penalty without serving the show cause notice and without a personal hearing violated the principles of natural justice, specifically the principle of "audi alteram partem." The petitioner argued that the penalty was imposed without any opportunity to present his case, which is a fundamental requirement for a fair adjudication process. The court acknowledged that the principles of natural justice were violated, as the petitioner was not given a fair opportunity to be heard.

4. Maintainability of the Petition in Light of Alternative Remedy:
The respondent department raised a preliminary objection regarding the maintainability of the petition, arguing that the petitioner had an alternative remedy under Section 35(B) of the Central Excise Act, 1944, to appeal before the Customs, Excise & Service Tax Appellate Tribunal (CESTAT). The court recognized that while an alternative remedy existed, the petition could be entertained under Article 226 of the Constitution of India due to the gross and clear violation of principles of natural justice. The court noted that the petitioner had claimed a violation of natural justice and non-affording of an opportunity of hearing, which warranted judicial intervention despite the availability of an alternative remedy.

Conclusion:
The court quashed and set aside the ex-parte order to the extent it concerned the petitioner, emphasizing the breach of principles of natural justice. The court directed that the show cause notice be served to the petitioner on his official email ID and provided the petitioner an opportunity for a personal hearing. The court refrained from entering into the merits of the matter, leaving it to be decided by the appropriate forum with the fullest opportunity for both parties to present their cases.

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