Customs, Excise and Gold Tribunal - Delhi
Charan Metal Corporation vs Collector Of Central Excise on 20 July, 1992
Equivalent citations: 1993ECR270(TRI.-DELHI), 1992(62)ELT450(TRI-DEL)
ORDER S.L. Peeran, Member (J)
1. The appellants are aggrieved with the confirmation of the demands made in the impugned order-in-original dated 18-1-1991 passed by the Collector of Central Excise, Kanpur. By the impugned order, the learned Collector has held that the appellants -
"...were merely trying to circumvent the due process of law by one plea or the other. Keeping in view the full facts of the case, I have reached the conclusion as reached by the then Collector of Central Excise, Kanpur that since the total clearance of steel furniture during the financial year 1972-73 had exceeded Rs. 2 lakhs M/s. Charan Metal Corporation were not entitled to claim exemption of clearances upto Rs. 1 lakh during the financial year under Notification No. 33/71 dated 1-4-1971 and Notification No. 101/72 dated 17-3-72 and also that the total value of steel furniture cleared during 1972-73 came to Rs. 1,53,723.63 P. plus Rs. 1 lakh i.e. Rs. 2,53,723.63 P. As I fully agree with the conclusion reached by the then Collector of Central Excise, Kanpur I confirm the order of the Collector of Central Excise, Kanpur in aforesaid order-in-original No. 38/Collr/MP/78 dated 30-6-1978."
2. The appellants' grievance is that the Tribunal had set aside the order of the Collector of Central Excise, Kanpur in order-in-original dated 30-6-1978 and the said order is non est and its confirmation is neither legal nor proper and that the learned Collector ought to have complied with the terms of the remand order and should have independently applied her mind to give a detailed reasoning. It is also contended that the Tribunal had directed the adjudicating authority to readjudicate the case within 4 months, as the learned Collector had not re-adjudicated within 4 months, the impugned order had become invalid as having been passed beyond jurisdiction or lack of jurisdiction and therefore, is null and void and requires to be set aside. The next grievance of the appellants is that the Tribunal had clearly directed to allow them the facility of Inspection of the records/documents taken possession of by the department. However, the learned Collector had deprived the appellants from the opportunity of inspection of records/documents, on which the appellants were seeking to rely for the purpose of defending their case. They contend that the reasons assigned for denying inspection is not tenable on a mere ground that the department is not relying on the seized documents/records. It is further alleged that the Collector had not afforded any opportunity of personal hearing in the matter despite a clear direction in the remand order and therefore, the impugned order has been passed in violation of principles of natural justice. The appellants have also made out several grounds but the same are not required to be brought out here for the reasons to be enumerated hereinbelow.
3. We have heard Shri Gopal Prasad, learned Consultant for the appellants and Smt. Sundaram, learned DR for the Revenue. We have carefully considered their submissions and have perused the records. The short point that requires to be determined in this case is as to whether the learned Collector was justified in upholding the order dated 30-6-1978 which has already been set aside by the Tribunal and as to whether there is violation of principles of natural justice and also the order dated 11-4-1989 of remand earlier given by the Tribunal.
4. The Tribunal by its order dated 11-4-1989 in paras 2 and 3 has stated as follows -
"After hearing Sh. Gopal Prasad, we also feel that the matter should be remanded to the Collector of Central Excise, Kanpur who should give necessary facility to the appellants for inspection of the documents, allow them reasonable time to file written reply after inspection of documents is complete and also grant opportunity of personal hearing before the matter is adjudicated de novo. We order accordingly.
Since this an old case relating to the period 1972-73, the Collector should complete the de novo adjudication within a period of 4 months from the date of receipt of this order by the Collector of Central Excise, Kanpur after complying with the directions given herein above."
5. In pursuance of the order of the Tribunal, the department informed the party vide letter dated 24-10-1989 to intimate the list of records/documents which they required to inspect in relation to the aforesaid adjudication case. As there was no response from them, another letter dated 12-12-1989 was issued for which the Manager of the appellant company informed the department that they submit their response after their Prop., Shri K.K. Mehra was available in Kanpur. As there was no response another reminder was issued to the party on 21-12-1989. In response to this letter, they replied vide letter dated 26-12-1989 that they wanted to inspect "the same records in your possession which were put up for inspection in the court of Chief Metropolitan Magistrate, Kanpur in case No. 4378/81 and 4379/81 related to above matter filed by you."
In the impugned order at para 4, it is related that an attempt was made to ascertain as to what were the records which were put up for inspection in the court of Chief Metropolitan Magistrate in the two cases. In the meantime, the party vide their letter dated 15-1-1990, informed the department that the 4 months fixed by the Tribunal for readjudication, had expired and that there was no jurisdiction left with the officers to now commence the de novo proceedings. The department by its letter dated 6-3-1990, informed the party to furnish a list of documents which they wished to consult with reference to the aforesaid case and also indicate the relevance of these documents to the show cause notice under consideration so that de novo proceedings could be finalised as early as possible. However, the appellants by their letter dated 4-4-1990 only reiterated their contention of the expiry of the time limit without giving the details of the documents needed for inspection. The department again issued another letter dated 26-4-1990 in which it was pointed out that the Tribunal's order/directions had been issued in the interest of early disposal of this old case but it appeared that the party was interested in delaying the proceedings and was not interested in cooperating with the department to finalise this old case. The appellants by their letter dated 11-5-1990 informed the department that the Proprietor was out of station and that they would intimate the records needed for inspection and by letter dated 15-6-1990 again stated that they needed to inspect the records put by this department before Chief Metropolitan Magistrate in case No. 4378/81 and 4379/81. The department again by letter dated 9-7-1990, directed them to submit the list of records related to this case, which they wished to consult. Finally with reference to this letter dated 9-7-1990, they submitted their letter dated 19-7-1990 a photocopy of their letter addressed to the Supdt. (Adj. Branch) dated 11-3-1987 in which there was a list of records for which inspection had been requested. They also mentioned that they had given a list to JDR before the Tribunal and also to the office at Kanpur. They also asked for a personal hearing. The department vide their letter dated 25-7-1990, informed the party that no date of hearing could be fixed without the inspection of records and that they were requested to submit again a list of records which they desired to consult. The party by this letter dated 11-8-1990 gave the following list of documents required to inspect and also asked for fixing a date for arguments --
1. Ledger 1972 Jan. - Dec.
2. Journal " " "
3. Cash Book " " "
4. Sales Register 1972, 1973 " "
5. Purchase register 1972 " "
6. Sale bill book for office 1972, 1973 " "
7. Sales challans for works and of- 1972, 1973 Office "
fice Work
8. Document filed by us before Coll-
ector & Board of Central Excise
...
The learned Collector has not fixed any date of hearing but has passed the impugned order. In para 7, the learned Collector has held that in the original show cause notice, the department had relied on the following documents only
1. Recovery Memo dated 11-10-1973
2. Statement of Sh. Kripa Shanker, Manager of the firm dated 11-10-1973
3. RG I register
4. Journal of the firm for 1973
5. Ledger of the firm for 1973
6. Cash book of the firm for 1973
7. Bill books The learned Collector has held that the party was given opportunity to inspect the records of the case on any working day vide office letter dated 6-1-1975 and that they had not come forward for inspection of such records but by their letter dated 30-10-1977 the party had requested for personal hearing and again requested for consultation of records. It is stated in the order that despite such delaying tactics the adjudicating authority permitted them to consult the records. As they were not satisfied they wanted to inspect some more records for which they had intimated vide letter dated 9-1-1978 and the department vide their letter dated 28-3-1978 granted them to inspect the following documents which were inspected on 28-3-1978 :
1. Bill book (factory) SI. No. 1 dated 9-1-1973 to S. No. 26 dated 11-10-1973 (rest pages blank)
2. Challan book (factory) S. No. 1 dated 9-1-1973 to S. No. 26 dated 11-10-1973 (rest pages blank)
3. Purchase register January 1973 to August 1973
4. Rought register alleged as Sales book 1973, which contains some rough calculations and accounts of reconciliation.
It is stated by the Collector that the party appeared for hearing on 30-5-1978 and at the time of hearing on 30-5-1978, they filed their written submissions but had not expressed any dis-satisfaction about any records being shown to them for inspection and therefore, the case was decided by Collector vide order dated 30-6-1978. The learned Collector has recorded in para 11 that the Bench had directed to grant inspection of the following documents -
1. Appellants' ledger for 1972 and 1973
2. " Journal -do-
3. " Cash book -do-
4. Sales of purchase register -do-
5. Appellants' Bill book -do-
6. " Challans -do-
7. Papers produced and filed by the appellants before the Collector of Central Excise, Kanpur and before the CBEC during the adjudication proceedings and at the appeal proceedings respectively.
The learned Collector has held in para 12 that the records asked for at this stage in 1985 were different from the relied upon documents relevant for the instant case. It is further stated by the learned Collector that -
"Due to the case being of 1972 and the case records being dealt with in connection with the prosecution proceedings the party's request could not be examined in the proper light and apparently the SDR did not bring to the notice of the Tribunal the facts that the records asked for at this stage were not the relied upon documents in the instant case, nor were they relevant to be inspected at the stage of appeal specially in view of the fact that at the stage of original adjudication every possible opportunity had been accorded to M/s. Charan Metal Corp. to inspect the records and submit their defence. From the final written submissions made before the adjudicating officer, it is apparent that M/s. Charan Metal Corp. did not have any grievance with regard to non-inspection of any records. It is apparent from the appeal before the CBEC also that they did not have any such grievance about non-inspection of records."
The learned Collector rejecting their prayer, has held that the party is trying to circumvent to departmental proceedings through such unreasonable requests for inspection of records at this stage of revision petition and have in fact, successfully benefited by creating confusion and postponing the due process of law.
It is pointed out before us by the learned Consultant that the above observations of the learned Collector were neither called for nor justifiable. He pointed out that the learned Collector had in 17 relied on records seized, which mentioned (in Col. A.B. C) the cash book of 1973, 3 bills in 5 pages (documents No. 3, 4, 5, 6 and 7) relied upon in the impugned show cause notice. Some of these relied documents of the year 1973 pertaining to the case had not been allowed inspection despite several requests. He also pointed out that there is no application of mind and none of the points raised by the party in their objections had been considered except to say that the demands are to be confirmed. He contended that some of the goods had yet been in the manufactured stage but the Collector had taken them into consideration which was against the principles laid down by the Supreme Court in East End Paper Industries as reported in 1990 (26) ECR 10 . The Consultant further submitted that as the documents had been seized pertaining to this case and the documents were very much relevant to make a reply to defend themselves. He relied on the following rulings --
1. Commissioner of Income-tax v. R.K. Sons [1983 (135) ITR 56]
2. Travancore Rayons Limited v. Union of India and Ors. [1978 (2) E.L.T. (J 378) (SC)]
3. Union of India v. Hind Lamp Ltd. [1989 (43) E.L.T. 161 (SC)]
4. Power Cables Co. v. Collector of Central Excise [1984 (16) E.L.T. 285] .
6. Smt. Sundaram, learned DR defended the order and contended that there was no case for further remand and that the party had been given sufficient opportunities in the matter and the attitude of the party also debars them from seeking any further opportunities. They cannot complain of any violation of principles of natural justice. The learned Collector was justified in upholding the previous order of the Collector although it had been set aside by the Tribunal.
7. Shri Gopal Prasad pointed out in reply, that the order of the previous Collector also suffered from patent errors inasmuch as that the Collector had confirmed the clubbing of clearances on the basis of some other order, which had never been put to the party and thus there was violation of principles of natural justice.
8. On going through the entire records of the case, it clearly follows that both the party and the department is at fault. It is now well settled that justice should not only be done, but it should be seen to have been done. The party against whom the department is proceeding, should be given full and fair opportunity to defend themselves. All the seized documents should be given inspection and the party should be provided with all opportunity to produce their evidence and submit their case not only by filing their written submissions but also by affording them an opportunity to cross examine the relied upon witnesses or to produce rebuttal evidence which is in their favour. The adjudicating authority should play fair inasmuch as, they should give personal hearing and all points on which the party has urged, should be fully considered by discussing the merits and demerits of the case and a speaking order should be issued. The party on their part, should fully cooperate with the adjudicating authority and not come in the way of adjudication by raising frivolous and unwanted objections. The party should also not obstruct the proceedings and cause delay in the adjudication. In this matter, unfortunately, the party having succeeded in getting the remand, has not cooperated with the authority in giving the list of documents which are required for inspection despite several reminders by the department. Ultimately, they have furnished the details by a list of documents, which according to the Collector, is not required to be shown as they were not relied upon by the department. The learned Collector has also held that the SDR had not made proper representation which resulted in the remand order. It has to be pointed out that such an observation by the learned Collector was not necessary and it was not open to the Collector to have commented the remand order. The department has every right to appeal against the order of this Tribunal and not having done so, it was not open to the learned Collector to have passed the comments as noted above. More so, after having accepted the order and had called upon the party to furnish the list of documents. The learned Consultant has pointed before us that the impugned order had given a detailed chart in para 17 which had also been relied by the previous Collector. He has pointed out that the records of 1973 are the ones which are relied by the department and the confirmation of duty pertains to the same. Therefore, it follows that what the party was interested in was inspection of the records, pertaining to 1973 which had been seized by the department. This contention of the learned Consultant is sustainable. The department has culled out the entire charges after having gone through the various records. They might have relied, in particular, some documents; while the party may require some other documents to counter the charge and to place the same in rebuttal. Therefore, it is not open to the learned Collector to have gone into such a detailed discussion as given in the order to reject the prayer of the appellants to seek inspection of the documents. The learned Collector has also pointed out that the previous order also suffers from several irregularities inasmuch as, the previous order had relied on some other order to come to conclusion pertaining to clubbing of clearances and the department had not placed these material before the party.
9. We have gone through the previous order and we do find the learned Collector having relied on some other material to come to conclusion against the party. The Tribunal, therefore, in its previous order, had upheld the party's contention for a remand. The remand order has been passed only after detailed hearing and consideration of the facts. Therefore, it follows that the learned Collector by not giving inspection of the documents asked for, and also by not giving personal hearing, has clearly violated the principles of natural justice.
10. It has to be pointed out that the party's stand that adjudication authority has no power to adjudicate as four months have lapsed and the adjudication has not been completed within the period laid down by the Tribunal, is not a correct stand of the party. The learned Collector is justified in coming to the conclusion that the party was raising unwanted objections to delay the proceedings.
11. In the result we set aside the impugned order and remand the case to the original authority with a direction to accord inspection of all the documents relied by the appellants and referred to by them in their letter dated 11-8-1990. The appellants should also be given opportunity to file the written objections and a personal hearing should be fixed and the adjudicating authority should consider all the defences raised by the party by passing a speaking order. It is made clear that the appellants shall fully cooperate in the matter and not protract the proceedings. They should avail of the opportunity of inspection on the date fixed by the department and if they fail to do so, then the department shall fix a date for personal hearing and proceed with the matter as per law as indicated above. The appeal is disposed of in the above terms.