2002 (8) TMI 366 - AT - Central Excise

Summary

Issues:
- Application for remission of duty on lost quantity of molasses under Rule 49 of Central Excise Rules, 1944.
- Lack of speaking order by the Commissioner on the remission application.
- Violation of principles of natural justice in rejecting the remission application.
- Demand of duty raised by the jurisdictional Range Supdt.
- Request for waiver of pre-deposit and stay of recovery pending appeal.

Analysis:

The appellants, manufacturers of excisable products, including molasses, experienced a loss of 784.910 MTs of molasses and sought remission of duty for the lost quantity under Rule 49 of the Central Excise Rules, 1944. Despite submitting the application on 29-2-2000, there was no action taken by the Commissioner, leading to reminders from the appellants. The Range Supdt. of Central Excise demanded duty on the lost quantity, while the appellants received a communication on 22-3-2002 stating that the remission request was rejected. The appeal aimed to challenge this decision and requested a waiver of pre-deposit of Rs. 3,92,455/- and a stay on recovery pending the appeal.

The Commissioner, as the authority vested with adjudicating on applications for remission exceeding Rs. 3 lakhs, failed to provide a speaking order in line with the principles of natural justice. The appellants were not granted an opportunity to be heard despite their request. The lack of communication from the Commissioner, except for the letter dated 22-3-2002, raised concerns regarding due process. The appellants sought to set aside the demand raised by the Range Supdt., citing relevant legal precedents supporting their position.

Upon examination, it was found that the Commissioner's actions did not adhere to the requirements of a quasi-judicial function under Rule 49. The rejection of the remission application without a hearing and communication through a subordinate officer was deemed improper. Following precedents, the impugned proceedings were set aside, and the appeal was allowed by remand. The Commissioner was directed to issue a speaking order on the remission application after providing the appellants with a reasonable opportunity to be heard. Additionally, there was a directive to halt any duty recovery proceedings on the lost molasses until the Commissioner's order was issued.