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ADJUDICATION UNDER CENTRAL EXCISE ACT, 1944 – SOME ISSUES

Central Excise - By: - Mr. M. GOVINDARAJAN - Dated:- 5-12-2015 - Meaning of adjudication The word adjudication ordinarily means to act and decide judicially. In Zenith Computers Limited V. Commissioner of Central Excise - 2014 (5) TMI 182 - BOMBAY HIGH COURT the High Court held that the word acting judicially is not performing some rituals or completing somehow the assigned work but is a serious business. It requires confined application of mind and alertness. It should not be undertaken casuall .....

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e Adjudicating Authority either at the time of replying to the show cause notice or at the time of personal hearing. The appellants participated in the said proceedings without any demur or protest. Only in the appeal filed before the Tribunal, this issue has been raised which is clearly an afterthought. If a point has not been raised before the Adjudicating Authority and has not been considered by the said authority it would be incorrect and inappropriate for the appellate authority to give a f .....

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r issue of show cause notice and during course of adjudication in extraneous to show cause notice, in absence of any corrigendum. Deciding the case, by relying on conclusion of Superintendent amounts to non application of mind. Demand in show cause notice Issuing of show cause notice is a must before adjudication. The show cause notice should clearly indicate the demand of duty under relevant section. In Sunita Ispat Private Limited V. Commissioner of Central Excise - 2014 (4) TMI 1028 - ALLAHAB .....

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odara - 2008 (11) TMI 610 - CESTAT AHMEDABAD the Tribunal held that second show cause notice on same issue and period is not sustainable even though it was issued after gathering additional investigation/information/material. Theoretically or hypothetically, if Revenue in course of further investigation finds some more material and evidence against assessee, they cannot be allowed to issue a third show cause notice in respect of same allegation and for the same period on ground that further inve .....

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wants to be heard in person. Violation of the principles of Natural Justice by the Adjudicating Authority will be liable to be set aside in the appeal. In New Tobacco Company Limited V. Union of India 2014 (2) TMI 550 - GAUHATI HIGH COURT exemption granted vide Notification No. 32/99-CE was withdrawn retrospectively by Section 154 of the Finance Act, 2003. Show cause notice for rejection of refund was issued in 2001. CESTAT granted assessee opportunity of arguments only on stay application and r .....

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ospectivity being arbitrary and not applicable to impugned case. In Commissioner of Customs & Central Excise, Chattisgarh V. Raigarh Enterprises - 2012 (7) TMI 511 - CHATTISGARH HIGH COURT it was held that if the taxing authorities did not consider it proper to grant any tax benefit under the Act to an assessee or when it was noticed that the assessee has availed of wrong benefit to which they were not entitled then principle of Natural Justice demand that they should have been served with p .....

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n of the Principles of Natural Justice. In Union of India V. Lampo Computer (P) Limited - 2014 (4) TMI 1032 - KARNATAKA HIGH COURT the High Court observed the Tribunal s order. The CEGAT in their final order dated 12.02.2002 remanded the case to the original authority on the ground that the order suffers from denial of principles of Natural Justice. There was a specific direction to supply the documents relied upon by the Department in the show cause notice. However on going through the de novo .....

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y. Non furnishing of relief on documents is clearly a violation of denial of principles of Natural Justice. The de novo order also suffers from the vice of denial of principles of Natural Justice as the original order. The High Court directed the Tribunal to examine the effect of non supply of the documents relief upon by the Department in the show cause notice and also to consider whether the documents have any bearing on the outcome of the case. In Vishnu Steels V. Union of India - 2013 (5) TM .....

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med that assessee was in all likely to move Settlement Commission. The High Court set aside the adjudication order to avoid parallel proceedings. In Santogen Silks Mills Limited V. Commissioner of Central Excise, Vapi - 2010 (10) TMI 940 - CESTAT AHMEDABAD it was held that the case adjudicated without supplying relied upon document is violation of principles of Natural Justice. The Tribunal remanded the case for fresh adjudication. Cross examination In Mahek Glazes Private Limited V. Union of In .....

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ting authority was of the opinion that the request was not tenable, he could have rejected it and if he was inclined to accept it, he himself could not have finally disposed of show cause notice proceedings. In either case, assessee had right to know outcome of their application. Merely because Commission was of opinion that request was belated he could not deal with it only in final order. In Vulcan Industrial Engineering Co. Limited V. Union of India - 2013 (8) TMI 502 - GUJARAT HIGH COURT the .....

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of opinion that the request for cross examination was not tenable, by giving reasons he could have rejected it. Merely because Adjudicating Authority was of the opinion that assessee had made such a request somewhat belatedly, could not permit him to deal with such application only in final order itself. In Bird Audio Electronics V. Commissioner of Central Excise, Delhi - 2013 (9) TMI 90 - CESTAT NEW DELHI the Tribunal held that this is the case of wrong availment of CENVAT credit and the depart .....

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without cross examination is unacceptable. The Tribunal held that the entire statement of deponent discarded as untested evidence. In Commissioner of Central Excise, Allahabad V. Govind Mills Limited - 2013 (8) TMI 649 - ALLAHABAD HIGH COURT it was held that the assessee was entitled to cross examine that person as well as Excise Officer and in absence thereof report of excise officer and alleged confession could not be relied on. It was more so as person making confession was available and alle .....

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yana High Court, the High Court held that as a mere notice has been served calling upon the petitioner the show cause against the proposed levy of duty, are not inclined to entertain the petition. However, as representation filed by the petitioner regarding clarification of PTO Shafts is pending consideration before the CBE&C, New Delhi the Writ petition is disposed of by directing the said authority to decide the representation within one month of receipt of a certified copy of the order. T .....

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order in his own drawer without dispatching to assessee, latter would have no means of knowing of its making. Adjudication order must be placed by Adjudication Authority out of his control by dispatching it to assessee. After that stage is achieved the Adjudication Authority ceases to have any locus penitentiae and there is no possibility of Adjudication Authority tearing of the order or making a different order. Corrigendum to order-in-original In Garden Silks Mills Limited V. Commissioner of C .....

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BAI the appellant M/s Kilitch Company (Pharma) Limited is manufacturing P&P medicament on job work basis for M s Kilitch Drugs (India) Limited. Show cause notice was issued to both the appellants demanding differential duty by rejecting the valuation arrived at by the appellants M/s Kilitch Company (Pharma) Limited. Both the appellants filed reply to show cause notices. The Adjudicating Authority confirmed the demand recoverable from M/s Kilitch Drugs (India) Limited along with interest and .....

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) limited cannot be considered as corrigendum. It is total departure from confirmation of demand in adjudication order. The Tribunal set aside the order and remanded the case to the Adjudication Authority to decide the case afresh. Binding precedents In E.I. Dupont India Private Limited V. Union of India - 2014 (5) TMI 128 - GUJARAT HIGH COURT the High Court held that the decisions of higher appellate authorities/courts are binding in Adjudication proceedings. Binding decisions on identical ques .....

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sions of higher appellate authorities/Courts scrupulously to avoid unnecessary litigation as well as adverse observation of the High Courts. In Clari s Life Sciences Limited V. Union of India - 2014 (1) TMI 1467 - GUJARAT HIGH COURT the High Court held that the question of computation of education cess and secondary higher education cess was decided finally by Tribunal in favor of the petitioner. Such decision of Tribunal holds the field. Such decision of the Tribunal would be binding on the Adj .....

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is decisions should be within the allegations framed in the show cause notice. Beyond that the Adjudicating Authority is having no power to adjudicate. In Balakrishna Industries Limited V. Commissioner of Central Excise, Jaipur- I - 2011 (11) TMI 555 - CESTAT NEW DELHI the appellant applied to the department for outside storage of the finished goods manufactured by them under Rule 4(4) of the Central Excise. Permission was granted. The appellant renewed the same from time to time. A show cause n .....

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notice and withdrew the permission. It also held that during the period till 2011 in respect of domestic clearances from the outside storage place, interest would be chargeable from the appellant at the applicable rate for delay in payment of duty for the period from the date of removal from the factory to the date of clearance from the outside storage facility. The Tribunal found that the ground taken by the Revenue that such outside storage facility under Rule 4(4) continuously for several ye .....

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ces specifically mentioned that interest is not required to be paid by the appellant. By confirming interest in order-in-original Adjudicating Authority has gone beyond the scope of the show cause notice. Chartered Accountant s certificate In Dabur India Limited V. Commissioner of Central Excise, Ghaziabad - 2013 (4) TMI 467 - CESTAT NEW DELHI the appellant is a multinational, multi products company with turnover of more than ₹ 4,000 crores. The appellants have produced a certificate from .....

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