1999 (9) TMI 426 - AT - Central Excise

Summary

Issues:
1. Denial of principles of natural justice in an ex-parte decision by the Commissioner.
2. Admissibility of credit under Rule 56A of the Central Excise Rules for Polyester Staple Fibre Yarn.
3. Whether the processes carried out amount to manufacture and the liability to pay excise duty on the final product.
4. Violation of principles of natural justice leading to the need for remand for de novo consideration.

Analysis:

1. The appellants sought waiver based on the argument that there was a total denial of principles of natural justice as the Commissioner decided the case ex-parte, despite the appellants being unable to appear due to being declared a sick unit and the factory being under closure. The appellants requested an adjournment, which was denied, leading to the ex-parte order. The Tribunal found a violation of natural justice principles and granted the stay application, remanding the matter for de novo consideration by the Commissioner.

2. The department demanded duty, alleging that the appellants were not entitled to credit under Rule 56A for Polyester Staple Fibre Yarn. The appellants processed the yarn received from another company and cleared the final product after paying duty. The issue of admissibility of credit under Rule 56A was a key point of contention. The Tribunal noted that this issue was not adequately addressed in the impugned order, leading to a non-speaking order. The matter was remanded for the Commissioner to reconsider this aspect.

3. The appellants contended that the processes carried out did not amount to manufacture, and thus, they were not liable to pay excise duty on the final product. This specific issue was not addressed in the initial order, leading to a lack of clarity. The Tribunal emphasized the need for a detailed consideration of this defense and remanded the matter for the Commissioner to address this aspect in the de novo consideration.

4. The Tribunal, after considering the submissions, found that the adjournment requested by the appellants was genuine due to the closure of the company and referral to B.I.F.R. The failure to grant the adjournment resulted in a violation of natural justice principles. Despite the Commissioner addressing various points raised, the Tribunal emphasized the need for a fresh consideration due to the fundamental violation. The appellants were directed to provide updated addresses for further proceedings, and the matter was remanded for de novo consideration by the Commissioner.

Overall, the Tribunal allowed the appeal by way of remand, setting aside the impugned order and directing the Commissioner to issue notices to the appellants at their new addresses for a fresh hearing and a considered decision.