Customs, Excise and Gold Tribunal - Mumbai
Mubarakdin Bidi Factory vs Collector Of Central Excise on 28 November, 1986
Equivalent citations: 1987(10)ECR582(TRI.-MUMBAI), 1987(27)ELT474(TRI-MUMBAI)
ORDER G.P. Agarwal, Member (J)
1. The instant appeal is directed against the Order-in-Original No. 14/83/T.I.4ii/3ii dated 14.7.83 passed by the Additional Collector of Central Excise & Customs, Indore confiscating 8800 H.M. Biris valued Rs. 165/- with an option to redeem the same on payment of a redemption fine of Rs. 125/- and also demanding a duty of Rs. 83,317-90 on the goods removed without payment of Central Excise Duty besides imposing a penalty of Rs. 2,000/-.
2. Factual Backdrops: As a result of the surprise checking of the records and stocks of the appellant's factory - a biri manufacturer -8800 hand made biris in 22 pudas were found in excess of R.G.12A Register. During the course of checking of the factory some private records pertaining to manufacture of H.M. Biris were also recovered. After the scrutiny of private records it was found that the appellant had received 2,35,16,300 biris from different sattedars/persons during the period from 2.11.81 to 12.8.82, but only 16,48,750 H.M. Biris were accounted for in the R.G.12A Register during the said period. In his statement recorded on the spot, the appellant stated that the work of maintenance of the excise records was done by one Shri Hajrat Ibrahim who is illiterate and the excess stock was due to wrong entry in the said register. As a follow-up action a Show Cause Notice calling upon the appellant to show cause as to why a penalty be not imposed upon him under Rule 9(2), 52-A and 226 of Central Excise Rules, 1944 and why the seized goods be not confiscated under Rule 226 and also why duty be not demanded under Rule 9(2) 'Was issued. But inspite of several opportunities the appellant did not file any reply to the Show Cause Notice with the result that the adjudicating authority had to decide the case ex parte on the basis of the evidence available on record. In the ultimate analysis of the evidence available on record, the adjudicating authority concluded that there was an excess stock of 8800 biris and the appellant had removed the hand made biris without cover of Gate Pass and without payment of Central Excise duty as detailed out in the Show Cause Notice. Accordingly he confiscated the excess stock of 8800 biris and also demanded duty as aforesaid besides the penalty of Rs. 2,000/-.
3. We have heard Shri P.N. Kaul, learned counsel for the appellant and Shri Rakesh Bhatia, SDR for the respondent.
4. Shri P.N. Kaul, learned counsel for the appellant at the outset submitted that no opportunity to defend was given to the appellant as provided for in rule 233A of the Central Excise Rules, 1944. He submitted that 10 documents were relied upon by the Adjudicating Authority in the Show Cause Notice issued to the appellant. But copies of the same were not enclosed with the Show Cause Notice with the result the appellant had to make a request for the supply of the same vide their letter dated 18-11-82, while denying the charges levelled in the Show Cause Notice. But they were not supplied. In the result, the appellant asked for the inspection of the documents which was allowed to be inspected at Satna. But on account of the peak season of the biri-patta, the record could not be inspected at Satna as the concerned notice to inspect the documents was of a very short duration. Ultimately, he submitted that afterwards the appellant did not hear from the Adjudicating Authority and filed the provisional reply to the Show Cause Notice on 12-7-83. He vehemently contended that no personal hearing was ever granted to the appellant by the Adjudicating Authority before passing the impugned order. In reply, Shri Rakesh Bhatia, learned SDR submitted that the Department has also filed the Cross Objections and from para 11.18 it is clear that the said reply to the Show Cause Notice was received on 22-7-83 when in fact the case was adjudicated on 14-7-83. He further submitted that for the failure to inspect the documents the appellant himself is to be blamed when, admittedly, he did not dispute the fact that he was given a notice to inspect the documents at Satna. He further contended that when the appellant failed to inspect the documents at Satna, the Adjudicating Authority vide their letter dated 4-6-1983 (issued on 22-6-83) intimated the appellant that since the appellant neither availed the opportunity of taking extracts of the relied documents nor filed any reply to the Show Cause Notice within the stipulated period the case is being taken up for the decision on the available evidence on record. He contended that a copy of the said letter was also sent under Registered A.D. post to Shri Barjor Singh, Advocate, Gwalior for information which was duly received by the said Shri Barjor Singh, Advocate on 25.6.83. As regards the contention of the learned counsel for the appellant that personal hearing was not granted, Shri Rakesh Bhatia, learned SDR contended that since there was no request for personal hearing prior to the adjudication of the case, the question of granting personal hearing to the appellant did not arise.
5. After hearing both the parties we are of the view that the impugned order cannot be sustained on the admitted position by the Department that no personal hearing was given to the appellant. Under rule 233A of the Central Excise Rules, 1944 it is mandatory on the authority issuing the Show Cause Notice to afford a reasonable opportunity of making a representation and of being heard in the matter. The relevant rule may be reproduced herein:-
"Rule 233A - Issue of show cause notice before confiscation of any property or imposition of any penalty - No order confiscating any property, or imposing any penalty on any person shall be made under these rules. unless -
(a) a written notice stating the ground on which it is proposed to confiscate such property or to impose such penalty; and
(b) a reasonable opportunity of making a representation in writing within such time as may be specified in the notice against the grounds of confiscation or imposition of penalty mentioned therein and of being heard in the matter are given -
(i) where the order relates to confiscation of any property, to the person-in-charge of such property and, where such person-in-charge is not the owner of such property, also to the owner thereof; or
(ii) where the order relates to the imposition of any penalty, to the person on whom such penalty is to be imposed:
Provided that the notice referred to in clause (a) and the representation referred to in clause (b) may, at the request of the person or persons concerned, be oral." (Emphasis supplied)
6. From a bare reading of the said Rule, it is clear that a reasonable opportunity of being heard in the matter is a must unless the party affected waives his right of personal hearing. For this view we are supported by the order passed by this Tribunal in the case of P.K. Goel, New Delhi v. Collector of Customs, Delhi, 1983 E.L.T. 648 (C.E.G.A.T.) wherein interpreting the provisions of section 124 of the Customs Act, which is similar to rule 233A of the Central Excise Rules, 1944, it was held that "Section 124 is quite clear and unless a person waives his right of personal hearing he is to be heard by the adjudicating authority. As this has not been done in the present matter, the Assistant Collector's order is vitiated by a breach of the principles of natural justice and by the violation of section 124."
7. In the light of the foregoing discussions the appeal is allowed. The impugned order is set aside and the case is remanded to the Adjudicating Authority for a fresh adjudication after giving the appellant a reasonable opportunity to be heard in person. The Cross-Objections also stand disposed of accordingly.
8. Since the matter is an old one, the Adjudicating Authority is expected to expedite the matter.
ORDER P.C. Jain, Member (T)
9. I agree with my learned brother that the case is fit for being remanded to the adjudicating authority for fresh adjudication after giving the appellant a reasonable opportunity of being heard in person. I would also add that the appellant's reply dated 12.7.83, said to have been received in the office of the adjudicating authority on 22.7.83, should be taken into consideration before the decision on fresh adjudication is passed by the adjudicating authority. The appellant should also be given a reasonable time for inspection of records and taking extracts therefrom in support of his defence.
10. All the foregoing formalities are necessary because important questions of fact are involved before a decision can be given in the instant matter.