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Hari Om Udyog Versus Commissioner of C. Ex., Ghaziabad

2015 (6) TMI 1006 - CESTAT NEW DELHI

Chance to approach the Settlement Commission - grievance of the appellant is that the impugned order was passed ex parte and also that the adjudicating authority failed to consider his request to allow time to file an application before the Settlement Commission - Held that:- The appellant had promptly responded to all notices of personal hearing by filing a request for adjournment and also has intimated his intention to move the Settlement Commission for settlement of his case. The authority be .....

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. The impugned order suffers the infirmity of an order being passed violating the principles of natural justice. We, therefore, have no hesitation to hold that the impugned order has to be set aside and the matter has to be remanded to the adjudicating authority for de novo adjudication after giving the appellant time to file reply and opportunity of personal hearing.

The objectives of setting up of the Settlement Commission are to provide an alternative channel for dispute resolution .....

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up in litigation process. The adjudicating authority has failed to appreciate the law contained in Chapter V of the Central Excise Act, 1944 in the correct perspective. However, the plea of the ld. counsel for appellant to pass an order referring the present case to Settlement Commission cannot be granted

The national litigation policy is to reduce litigations by promoting alternate dispute resolution mechanism by settlement of cases. It is unfortunate that the appellant was denied s .....

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sultant, for the Appellant. Shri R.K. Gupta, DR, for the Respondent. ORDER [Order per : Sulekha Beevi C.S., Member (J)]. - The grievance of the appellant is that the impugned order was passed ex parte and also that the adjudicating authority failed to consider his request to allow time to file an application before the Settlement Commission. 2. The appellant is a partnership firm with 3 partners, namely Shri Ajay Kumar Gupta, Sh. Vijay Kumar Gupta (brothers) and Smt. Raj Rani Gupta (mother .....

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ises at Rudrapur, the depot premises at Gurgaon and factory premises of M/s. Su-Kam Power System Ltd., at Baddi. 3. A show cause notice dated 9-7-2012 was issued to the appellants on the basis of documents/records resumed, statements recorded and enquiries conducted. The allegation is that the appellant, M/s. Hari Om Udyog, Ghaziabad was indulging in evasion of excise duty by way of under-valuation/suppression of actual value by showing clearances of finished goods and fabricated invoices a .....

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n ex parte order as contented by the appellant. Shri M.K. Gupta, the learned counsel appearing for the appellant, submitted that after receiving the show cause notice, the appellant vide letter dated 25-10-2012 requested for return of documents/laptop resumed during the search in order to prepare the reply. To this, the Additional Commissioner (ADJ), Central Excise, Ghaziabad issued a letter to the appellant on 17-7-2013. In this letter the appellant was directed to contact Directorate General o .....

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nd also to allow two months time for filing reply to the show cause notice. A corrigendum in regard to show cause notice was issued to the appellants on 28-10-2013. Again a letter dated 28-10-2013 was issued to the appellant informing that the personal hearing has been fixed on 26-11-2013. The appellant vide letter dated 22-11-2013 intimated the adjudicating authority their intention to approach the Settlement Commission and also requested to keep in abeyance the adjudication proceedings. The Su .....

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date for personal hearing was fixed as 10-2-2014. The appellant then sent a letter dated 31-1-2014 to the Supt. (ADJ) inviting his attention to the appellants earlier letter dated 22-11-2013, informing that all the noticees are going to file applications for settlement of the cases before the Settlement Commission shortly and requested to keep the adjudication in abeyance. A further letter dated 12-2-2014 was sent by the appellant to the Commissioner, Ghaziabad informing that the application to .....

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ree chances for personal hearing and also sufficient time to file reply. He urged that there is no statutory provision under the Central Excise Act, 1944 or in the rules made thereunder to keep the adjudication proceedings in abeyance on the request of the party to file an application before the Settlement Commission. 6. On examination of the factual scenario with regard to the various dates preceding to the passing of the impugned order, we find that the impugned order suffers from infirmi .....

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e appellant on 21-6-2013 to collect the document/laptop from the DG (AE) office. The appellant then sent the request to the DG (AE) to return the laptop, CPU and other documents. As per the receipt of acknowledgement the laptop was returned to the appellant only on 3-9-2013. The matter was thereafter posted for personal hearing on 20-10-2013, 26-11-2013, and 10-2-2014. The appellant had promptly responded to all notices of personal hearing by filing a request for adjournment and also has intimat .....

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proceedings hastily and passed the order in a hurried manner, for reasons which we do not know. The impugned order suffers the infirmity of an order being passed violating the principles of natural justice. We, therefore, have no hesitation to hold that the impugned order has to be set aside and the matter has to be remanded to the adjudicating authority for de novo adjudication after giving the appellant time to file reply and opportunity of personal hearing. 7. The second argument advanc .....

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that an order be passed by this Tribunal referring the case to the Settlement Commission. At this juncture, it is worthy to mention that the appellant had filed writ petition (Writ Tax No. 242 of 2014) before the Hon ble High Court of Allahabad, the jurisdictional High Court, praying among other things to set aside the impugned order and an order allowing the appellants (petitioners) to file an application before the Settlement Commission. The Hon ble High Court vide order dated 16-4-2014 dismis .....

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f ₹ 75.14 lakhs. The copy of the challan s produced along with the appeal shows that the appellant has paid an amount of 50 lakhs on different dates from the date of the search, 6-11-2009 to 13-11-2009. This action of the appellant depositing part of the demand raised reflects the genuineness of the request of the appellant seeking time to prepare and file applications before the Settlement Commission. However, the request by the appellant made in various letters not to conclude the procee .....

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1944 defines case as under; (c)  case means any proceeding under this Act or any other Act for the levy, assessment and collection of excise duty, pending under an adjudicating authority on the date on which an application under sub-section (1) of section 32E is made : Provided that when any proceeding is referred back in any appeal or revision, as the case may be, by any Court, Appellate Tribunal or any other authority, to the adjudicating authority for a fresh adjudication or decision, as .....

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ing authority ought to grant reasonable time to prepare the application and present the same before the Settlement Commission. What is reasonable time would depend upon the facts and circumstances of each case. The adjudicating authority is not justified in totally ignoring the request on the ground that there is no provision in the statute to keep the proceedings in abeyance when such request is made by assessee. Some cases may have voluminous documents, complex issues, or detailed evidence to .....

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the application for presenting before the Settlement Commission when the adjudicating authority has nothing to suspect the bona fides of the appellant s request. 11. The objectives of setting up of the Settlement Commission are to provide an alternative channel for dispute resolution for the assessee and to expedite payment of Customs, Central Excise, and Service Tax, involved in disputes by avoiding costly and time-consuming litigation process. It also provides an opportunity to taxpayers .....

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appellant to pass an order referring the present case to Settlement Commission cannot be granted. 12. Sub-clause (1) of Section 35C states that the Appellate Tribunal may, after giving the parties to the appeal an opportunity of being heard, pass such orders thereon as it thinks fit, confirming, modifying or annulling the decision or order appealed against or may refer the case back to the authority which passed such decision or order with such directions as the Appellate Tribunal may thin .....

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der referring a case for settlement before the Settlement Commission. He relied on the decision rendered by the Apex Court in J.K. Synthetics Ltd. v. CCE reported in 1996 (86) E.L.T. 472 (S.C.) and made a frail attempt to convince us that this Tribunal has wide powers under Rules 20, 21 and 41 of the Customs, Excise and Service Tax Appellate Tribunal (Procedure) Rules, 1982 to make such orders or give such directions as might be necessary or expedient to give effect or in relation to its orders .....

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