TaxTMI 
TaxTMI 
2018 (7) TMI 2102
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....one and the same and an assessee with the Central Excise Department. The following are the facts and circumstances, which culminated into filing of these appeals by the assessee. (i) The assessee engaged in the manufacture of cotton yarn, polyester yarn and polyester cotton blended yarn, etc. Based on an information received that the assessee had indulged in unaccounted manufacture of fabrics of cotton, etc., and clandestinely cleared them without payment of duty and indulged in clearance of grey fabrics in the guise of grey fabrics/loom-state fabrics, officers attached to Headquarters Preventive Unit of Madurai Central Excise Commissionerate visited the assessee's unit and conducted stock challenge of finished fabrics, stocked in the bonded Excise godowns, Grey Warehouse and Finished Warehouse. Based on a prima facie and reasonable belief that excess quantities were kept for illicit removal without bringing them into RG+ stock, the Revenue seized those excess stocks under mahazars. Thereafter, the seized fabrics were released to the assessee provisionally on execution of General Bond for Rs. 1,01,04,000/- (Rupees one crore one lakh and four t....
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....1-11-2008 and 27-11-2008 respectively, once again confirming the duty, penalty and confiscation. (iii) Challenging the said orders-in-original, the assessee once again went on appeal before the Tribunal. By an order, dated 5-5-2009 passed in Final Order Nos. 550 and 551 of 2009, the Tribunal once again set aside the orders-in-original and remitted the case for fresh decision only on the reason that the assessee was not supplied with the said letter, dated 20-1-2001, as directed by the Tribunal in its earlier order, dated 28-2-2006. Accordingly, the Tribunal directed the Revenue to furnish a copy of the said letter with annexure mentioned therein and decide the case after extending reasonable opportunity to the assessee of being heard. (iv) The Revenue however filed application under Section 35C(2) of the Central Excise Act, 1944 and prayed for rectification of the mistake in respect of Final Order Nos. 550 and 551, dated 5-5-2009 by contending that non-supply of the letter, dated 20-1-2001 with its enclosures did not violate the principles of natural justice, as the said letter itself had originated from the assessee themselves. It is also ....
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....ation of principles of natural justice, since one of the material document referred to in the show cause notice namely, the letter dated 20-1-2001 with annexures furnished by the assessee to the Department even before issuance of show cause notices was not supplied despite several requests made for furnishing the same. The Revenue failed to supply a copy of the said letter with annexures, even though a specific direction was issued by the Tribunal in its Final Order passed on 6-9-2006. The said letter was not furnished to the assessee even after the subsequent fined order passed by the Tribunal on 5-5-2009 specifically remanding the matter with a direction to furnish a copy of the said letter to the assessee and thereafter to conduct the enquiry and to pass an order of adjudication. Therefore, the order of adjudication passed without furnishing such document violates the principles of natural justice. f) (b) The rectification application and the subsequent modification application filed by the Revenue before the Tribunal are not at all maintainable. Section 35C(2) of the Central Excise Act, 1944 does not empower the Tribunal to entertain ....
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....ttedly is the letter of the assessee themselves with enclosures. Though initially a copy of the said letter was not furnished to the assessee, however the said letter along with copies of other documents except document in S. No. 15, were furnished to the representative of the assessee on 26-3-2002, which was duly acknowledged by him. Therefore, the very contention as if the said letter was not furnished to the assessee is factually incorrect. The assessee in their own letter, dated 19-8-2004, in effect, only sought for providing the copies of four documents once again, out of which, one is the letter, dated 20-1-2001 with enclosures. Therefore, the appellant admitted the receipt of the said letter earlier and however, they sought for furnishing the same once again. Therefore evidently the appellant was dragging on the matter by repeatedly asking for copy of the said letter, even though the same was furnished as early as on 26-3-2002. Finally, though the assessee submitted a letter on 25-1-2006, at the time of personal hearing, requesting for two months time to reply to the show cause notice, the fact remains that the assessee did not file a reply at all. Consequently, the Adjudica....
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....opy of the said letter with enclosures to the assessee, is not empowered to modify its own order, which in-turn would amount to review, in the absence of any power to do so under the Central Excise Act. 12. Let us consider the first contention of the appellant with regard to the non-furnishing of the letter dated 20-1-2001. 13. It is true that the show cause notices issued on 11-5-2001 and 2-11-2001 referred to the said letter dated 20-1-2001 along with enclosures at S. No. 14 of Annexure-B documents relied upon. There is no dispute to the fact that the said letter with enclosures is nothing but an explanation given by the assessee themselves to the shortages and excess of fabrics in the Excise godowns noticed vis-à-vis, system stock. Therefore it is evident that the said letter is their own document explaining the shortages and excess of fabrics, which is the subject-matter of the show cause notices. Thus it is evident that the said letter was issued by the assessee immediately after the investigation conducted at their premises, even before the issuance of the show cause notice. Perusal of the show cause notice would clearly indicate that the Commissioner o....
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....tural justice was not violated. We find force in the said submission not only based on such acknowledgement on 26-2-2002 and also in view of the assessee's own communication, dated 19-8-2004 addressed to the Commissioner of Central Excise, Tirunelveli, requesting him to once again provide copies of four documents, out of which, one is the said letter, dated 20-1-2001. The said letter reads as follows : The Commissioner of Central Excise, Central Excise Revenue Building NGO "A" Colony, Tirunelveli - 627 007. Sir, Sub : Show Cause Notice No. 20 of 2001, dated 2-11-2001 and No. 30 of 2001, dated 11-5-2001. This refers to our letter dated 5th July, 2004 and your office response letter dated 8th July, 2004 on the above subject. We humbly submit that we are in the process of preparing reply to the above show cause notices. We once again bring to your kind notice that in view of closure of our unit Madura Fabrics Division in early 2002 to which the above show cause notices were issued and due to non-availability of personnel who handled excise records during the relevant period, we are even unable to trace out certain....
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....h was also signed by the Manager (Excise) of the assessee. Therefore, it is evident that finally on 25-1-2006, during the personal hearing, though two months time to reply to the show cause notice was sought for, the assessee, did not give such reply. On the other hand, an order in Original was passed on 28-2-2006. 18. From the above discussion of facts and circumstances, we are of the firm view that there is no violation of principles of natural justice in this case, as contended by the appellant, insofar as the non-furnishing of the said letter dated 20-1-2001 is concerned. 19. Admittedly, the said letter, dated 20-1-2001 is not available with the Revenue. It is claimed by the assessee that copy of the said letter is also not available with the assessee. We have already pointed out that the said letter with enclosures had emanated only from the assessee and therefore, it is their own document. We have also pointed out that the said letter is nothing but an explanation regarding the alleged short-fall and excess of the fabrics. Therefore, it was for the assessee to give a suitable reply to the show cause notices, as the contents of the said letter was already discu....
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....ich reads as follows : 35C. Orders of Appellate Tribunal. - (1) The Appellate Tribunal may, after giving the parties to the appeal an opportunity of being heard, pass such orders thereon as it thinks fit, confirming, modifying or annulling the decision or order appealed against or may refer the case back to the authority which passed such decision or order with such directions as the Appellate Tribunal may think fit, for a fresh adjudication or decision, as the case may be, after taking additional evidence, if necessary. (1A) The Appellate Tribunal may, if sufficient cause is shown, at any stage of hearing of an appeal, grant time, from time to time, to the parties or any of them and adjourn the hearing of the appeal for reasons to be recorded in writing : Provided that no such adjournment shall be granted more than three times to a party during hearing of the appeal. (2) The Appellate Tribunal may, at any time within six months from the date of the order, with a view to rectifying any mistake apparent from the record, amend any order passed by it under sub-section (1) and shall make such amendments if the mistake is brought t....
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....as contemplated under Section 35C(2) of the Act, does not mean the power either to review or modify the order itself, that too in the absence of a mistake committed by the Tribunal, which should also be apparent on the face of the records. 24. No doubt, the Revenue sought to rely upon Rule 41 of the said Rules in support of maintainability of the Modification Petition. The said Rule reads as follows : Rule 41. Orders and directions in certain cases. - The Tribunal may take such orders or give such directions as may be necessary or expedient to give effect or in relation to its orders or to prevent abuse of its process or to secure the ends of justice. 25. We have given our careful consideration to the said Rule. First of all, we would like to point out that statutory rules cannot, either override the provision of law stated in the relevant enactment or empower the authorities to act beyond or over and above the power conferred under the enactment. In the absence of any specific power contemplated under the Central Excise Act, 1944, either to review or to modify the orders. We are of the view that by virtue of Rule 41 alone, the Tribunal is not entitled....
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....asing the liability of the other party, shall not be made under this sub-section, unless the Appellate Tribunal has given notice to him of its intention to do so and has allowed him a reasonable opportunity of being heard. (2A) The Appellate Tribunal shall, where it is possible to do so, hear and decide every appeal within a period of three years from the date on which such appeal is filed. (Emphasis added) 8. Although the ground for rectification, namely, an error on the face of the record may be common to a power for review, the nature of the power to be exercised in the two cases is distinct. The power of review is not limited to rectification and is wider than the power conferred under Section 35C(2). (emphasis supplied) 27. 2009 (236) E.L.T. 431 is sought to be relied upon by the appellant to contend that there is no power to condone the delay beyond the period prescribed under Section 35C(2). We have already discussed that the very application for modification itself is not maintainable and therefore, the question whether it was filed within time or not is immaterial. Hence, the above decision is not applicable to the present facts an....
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....the document (letter, dated 20-1-2001 with enclosures) as directed by the CESTAT or be informed of the non-availability of the same so as to file reply. In this connection, he also gave a written representation. A communication was sent to them on 14-7-2008 informing that, MCL projected before the CESTAT as if a copy of the said letter dated 20-1-2001 was not made available to them; whereas, vide their letter dated 22-6-2002, MCL fairly admitted receipt of copies of all documents relied on in the notice; even if they had misplaced their copy as stated before CESTAT copies of the said letter with enclosures should have been available with MCL; and therefore they may file reply to the notices. The communication also mentioned the dates on which MCL was free to appear for hearing. At the time of hearing held on 16-9-2008, Shri S.S. Thakkur, Vice President (Excise and Legal) appeared along with Shri M. Ramasubramanian, Manager (Excise). They filed reply with reconciliation statements. It was argued that there was no evidence to prove clandestine removal and hence, demand made in the notice would not survive. They accordingly, requested for dropping the proceedings. 9. At ....