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2016 (9) TMI 984 - HC - Central ExciseValidity of order directing special audit - Section 14AA of the Central Excise Act, 1944 - breach of principles of natural justice - petitioner was not afforded any opportunity of hearing - non-specification of any ground that the petitioner has availed of duty credit or utilised cenvat credit beyond the normal limits - Held that:- Section 14AA of the said Act empowers the Principal Commissioner or the Commissioner of Central Excise to have the accounts of a manufacturer audited by a cost accountant or a chartered accountant nominated by them in the event he finds any of the grounds enumerated therein to be satisfied. As the impugned order stands, the Commissioner has not specified the materials on the basis of which he has formed the opinion that the petitioner has availed of duty credit or utilised cenvat credit beyond the normal limits having regards to the nature and quantity of finished goods manufactured and cleared. The Commissioner has not discussed the nature of finished goods manufactured and cleared by the petitioner. The Commissioner has not discussed of the quantum of the duty credit or utilised cenvat credit by the manufacturer. The foundational basis for the assumption of jurisdiction by the Commissioner under Section 14AA of the said Act has not been stated in the impugned order. Therefore, the impugned order is unreasoned. Section 14AA of the said Act does not contemplate that the assessee is entitled to a right of hearing before a decision is taken thereunder. By applying the ratio of decision of Hon'ble Supreme Court in the case of Sahara India (firm) vs. Commissioner of Income-Tax & Another [2008 (4) TMI 4 - Supreme Court] and more particularly when Section 14AA of the said Act entails civil consequences and where such section does not specifically debar the application of the principles of natural justice, the authorities are, therefore, required to afford a reasonable opportunity of hearing to an assessee before a decision is arrived at under such section. In the present case, it does not appear from the materials made available on record that the authorities have afforded the petitioner an opportunity of hearing prior to the issuance of the impugned order. Therefore, the impugned order is set aside. - Appeal disposed of
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