Custom, Excise & Service Tax Tribunal
M/S.Bharat Roll Industry (P) Ltd. ... vs Commissioner Of Central Excise, Haldia on 25 July, 2013
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE
TRIBUNAL, KOLKATA
EASTERN ZONAL BENCH: KOLKATA
Stay Petition No.SP-501/10
&
Appeal No.Ex.Ap.441/10
(Arising out of Order-in-Original No.08/Commissioner/CE/Haldia/Adjn/2010 dated 16.03.2010 passed by the Commissioner of Central Excise, Haldia Commissionerate, Kolkata.)
FOR APPROVAL AND SIGNATURE
HONBLE DR. D.M. MISRA, MEMBER(JUDICIAL)
HONBLE DR. I.P. LAL, MEMBER(TECHNICAL)
1. Whether Press Reporters may be allowed to see
the Order for publication as per Rule 27 of the CESTAT
(Procedure) Rules, 1982?
2. Whether it should be released under Rule 27 of the
CESTAT(Procedure) Rules, 1982 for publication in any
Authorative report or not?
3. Whether Their Lordship wishes to see the fair copy
of the Order?
4. Whether Order is to be circulated to the Departmental
Authorities?
M/s.Bharat Roll Industry (P) Ltd. (Unit-I)
Applicant (s)/Appellant (s)
Vs.
Commissioner of Central Excise, Haldia
Respondent (s)
Appearance:
Shri J.P.Khaitan, Sr.Advocate, Mrs.Chandreyi Alam (Gupta), Advocate & Shri Partha Banerjee, Advocate for the Appellant Shri S.Chakraborty, A.C.(A.R.) for the Respondent CORAM:
Honble Dr. D.M. Misra, Member(Judicial) Honble Dr. I.P. Lal, Member(Technical) Date of Hearing:- 25.07.2013 Date of Pronouncement :- 25.07.2013 ORDER NOS-513/A-216/KOL/13 Per Dr. D.M. Misra.
1. This is an Application seeking waiver of pre-deposit of duty of Rs.1.21 Crores and equal amount of penalty imposed under Section 11AC of Central Excise Act, 1944.
2. Shri J.P.Khaitan, Ld.Sr.Advocate appearing for the Applicant has submitted that the dispute involved in the present case centers around the issue of determination of assessable value of waste and scarp generated during the course of manufacture of rolls and transferred to their sister units. He has submitted that the Applicant has determined the assessable value of the transferred waste and scarp to sister units, under Rule 8 of Central Excise Valuation Rules, 2000 applying CAS-4 method. It is his submission that the department has wrongly applied CAS-4 method, inasmuch as, while arriving at the assessable value of the scrap, they have taken a part of the processing cost of the final product instead of the processing cost attributable for generation of the scarp. In their case, no processing charge would be allocated to the scrap generated during the course of manufacture, as there is no processing cost involved on that. The Ld.Advocate further submitted that the show cause notice of hearing has been adjudicated by the Ld.Commissioner ex-parte by extending only one opportunity of hearing on 03.03.2010. Ld. Advocate further submitted that the notice of hearing was issued to them in February, 2010 fixing the date of personal hearing as 03.03.2010. The Applicant could not attend the said hearing due to some difficulty and sought adjournment. The Ld.Advocate submitted that as per Section 33A of Central Excise Act, 1944, at least three opportunity of hearings be allowed to an assessee before the case is finally adjudicated. In this case the procedure prescribed under the said provision has not been followed, resulting into, gross violation of principles of natural justice.
3. The Ld.A.R. for the Revenue has submitted that even though the show cause notice was issued to them in October, 2009 directing them to file their reply within 30 days from the date of receipt of the notice, the Applicant has neither filed reply nor requested any extension of the said period in filing their reply to the show cause notice. However, the Ld.A.R. fairly conceded that the adjudicating authority ought to have given at least three dates of hearing as prescribed under Section 33A of Central Excise Act, 1944.
4. In his rejoinder Shri J.P.Khaitan, Ld.Sr.Advocate has fairly accepted there is also lapse on the part of the applicant/assessee in not filing reply to the show cause notice or requesting any extension in filing the reply to the show cause notice. The Ld.Advocate further submitted that on similar circumstances the Honble High Court has directed to deposit 10% of the duty involved after modifying the Tribunals order directing pre-deposit of 30% of the duty. The Ld.Advocate fairly made an offer to make a deposit of Rs.10.00 Lakhs in the present case.
5. After hearing both sides we find that the Appeal itself could be disposed of at this stage. Thus the Appeal is taken for disposal with the consent of both sides.
6. We find that the Ld.Adjudicating Authority has decided the issue ex parte after giving opportunity of hearing only once i.e. on 03.03.2010. The Ld.Commissioner, in our opinion, as per Section 33A of Central Excise Act, 1944 is duty bound to provide three opportunities of hearing. In this case the Ld.Commissioner has not followed the procedure of adjudication laid down under Section 33 of Central Excise Act, 1944 and proceeded to decide the case ex parte after the first date of hearing, to which the Applicant had sought an adjournment. We also find that even though the notice was issued to the Appellant way back in October, 2009 they have failed to furnish the reply to the show cause notice nor they have sought extension of time in filing reply to the show cause notice. This is also a lapse on the part of the Applicant/Assessee which cannot be encouraged. In these circumstances we are of the opinion that Revenue is at fault in not giving ample opportunity of hearing, the assessee is also at fault in not filing reply to the show cause notice. Thus, the Applicant should be put to terms before the case is remanded for fresh adjudication by the adjudicating authority. In these circumstances, the offer made by the Ld.Advocate seems to be reasonable. Therefore, we direct the Appellant to deposit Rs.10.00 Lakhs within a period of six weeks from the date of communication of this order. The Ld.Adjudicating Authority is directed to decide the issue afresh after making note of compliance with the said direction. The Appellant is directed to co-operate with the adjudication process. Needless to mention the appellant be granted reasonable opportunity of hearing, and the Appellant should avoid taking adjournments. It is made clear that we have not expressed opinion on any of the issues. Both sides are at liberty to adduce evidences in their favour. In the result the impugned order is set aside and the Appeal is remanded to the adjudicating authority for deciding all issues afresh. Appeal allowed by way of remand. Stay Petition disposed of.
(Pronounced and dictated in the open court.) Sd/- 29/07/13 Sd/- 29/7/2013 (I.P.LAL) (D.M.MISRA) MEMBER(TECHNICAL) MEMBER(JUDICIAL) sm 5 Appeal No.Ex.Ap.441/10