TMI Blog2011 (7) TMI 1173X X X X Extracts X X X X X X X X Extracts X X X X ..... consignment at the time of removal of the goods with effect from 25-6-2011 to 24-9-2011. (ii) Payment of excise duty by utilization of CENVAT credit as provided under Rule 3(4) of the CENVAT Credit Rules, 2004, is ordered to be stopped with effect from 25-6-2011 to 24-9-2011. During this period, the afore named assessee is required to pay excise duty without utilizing CENVAT credit. However, the assessee is permitted to take CENVAT credit on goods received during this period, which can be utilized for payment of duty on goods cleared from the factory after the aforesaid period is over. (iii) The assessee will maintain records of receipt, disposal, consumption and inventory of the principal inputs on which CENVAT credit has not been taken with effect from 25-6-2011 to 24-9-2011. (iv) The assessee will intimate the jurisdictional Superintendent of Central Excise within twenty four hours of the receipt of principal inputs in the factory on which CENVAT credit has or has not been taken and the same should be kept available for verification for the next 48 hours. This restriction will be applicable for the period from 25-6-2011 to 24-9-2011. 10. The assessee is als ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not in dispute that pursuant to the said reply, respondents did not supply any documents to the petitioner but proceeded to pass final impugned order dated 20th June 2011, imposing certain restrictions on availment of CENVAT credit and other restrictions noted above. 5. The main ground on which the petitioner has challenged the order is that without supplying any documents, statements or other materials, the respondents have unilaterally proceeded to hold that the petitioner is prima facie involved in clandestine removal of goods. It was contended that in the show cause notice, none of the statements or documents referred to in the final order have been cited. The petitioner thus had no idea about the nature of material collected against it. Despite demand, such material was neither supplied nor revealed to the petitioners. 6. It was pointed out that the authorities have acted with total non-application of mind. In one of the cases viz. Special Civil Application No. 8277/2011, representative of the petitioner-Company had appeared for personal hearing and also made detailed representation pursuant thereto. However, in the final order, it is recorded that no-one remained presen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ; (ii) payment of duty by utilization of CENVAT credit may be restricted and the assessee shall be required to pay excise duty without utilizing the CENVAT credit; (iii) the assessee may be required to maintain records of receipt, disposal, consumption and inventory of the principal inputs on which CENVAT credit has not been taken; (iv) the assessee may be required to intimate the Superintendent of Central Excise regarding the receipt of principal inputs in the factory on which CENVAT credit has or has not been taken, within a period specified in the order and the said inputs shall be made available for verification upto the period specified in the order. Paragraph 2 of the Notification also envisages imposition of stricter and stringent restrictions in case where manufacturer/dealer is found to be knowingly involved in repeated defaults. Paragraph 3 of the Notification lays down that the provisions of this notification shall be applicable only in a case where the duty or CENVAT credit alleged to be involved in the offences specified in para 1 is more than ₹ 10 lakhs. Paragraph 4 of the Notification lays down the procedure for imposition of restric ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tation made by such person before forwarding such recommendations to the Board. The law is well settled. In any action of the State involving adverse civil consequences to a citizen, unless the Statute specifically or by necessary implications excludes requirement of hearing, the principles of natural justice would automatically apply, and hearing would be necessary before any such adverse orders could be passed or action could be taken. In the present case, quite to the contrary, procedure itself envisages giving an opportunity of being heard to a person likely to be affected prejudicially by the order that may be ultimately passed. It also requires the authorities to take into account representation, if so made by such a person. In case of Smt. Maneka Gandhi v. Union of India Anr., reported in AIR 1978 SC 597, it was observed that - 32. It is well established that even where there is no specific provision in a statute or rules made thereunder for showing cause against action proposed to be taken against an individual, which affects the rights of that individual, the duty to give reasonable opportunity to be heard will be implied from the nature of the function to be perf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order could be passed and ultimately implemented. The procedure envisaged under Rule 12AA and 12CC of the respective rules should not therefore be confused with the full fledged departmental proceedings for recovery of unpaid excise duty or for imposition of penalties including personal penalties. These proceedings, therefore, are necessarily in the nature of summary proceedings. The very fact that such restrictions are allowed to be imposed on prima facie satisfaction of the authorities that the person concerned has engaged or involved himself in any of the illegal acts mentioned in clauses (a) to (g) of para-1 of the Notification would show that it would not be necessary to establish the allegations and charges beyond reasonable doubt, and only prima facie satisfaction would be sufficient. This coupled with the fact that the restrictions envisaged are for a limited period and are in the nature of suspension of certain facilities or restriction on availment of certain credit facilities temporarily, would convince us that the order, though may have temporary unpleasant consequences on the assessee, the same does not have any permanent adverse effect. Viewed from this angle, we m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... osal for imposing restrictions should be withheld. These cases, however, must be few and far between, in the nature of exception and not a matter of rule. Having said so, reverting back to the facts of the present case, we find that none of the documents, heavily relied upon by the Department - right from the stage of sending the proposal by the Additional Commissioner and issuance of show cause notice, though time and again demand, such documents were not supplied. Such documents were placed before the Director General. The Director General, in turn, sent his opinion to the Board after having examined the proposal of the Addl. Director General and having perused the material accompanying such a proposal. Ultimately, the impugned order came to be passed, without ever supplying documents to the petitioners. Such documents were numerous. These documents, from the impugned order, clearly emerges were not merely the statements of the petitioners themselves or the documents collected from the factories of the petitioner but there were several other statements of witnesses who were independent in nature. Without referring to these documents, statements and other materials in the show ..... X X X X Extracts X X X X X X X X Extracts X X X X
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