Order Date – 09 February 2023

Parties: M/s Rajputana Stainless Limited Vs Union of India

Facts –

• The Petitioner, M/s Rajputana Stainless Limited, was alleged that it had abetted with M/s Suraj limited in availing Cenvat Credit based on the invoices issued by the petitioner without receipt of goods.
• The Respondent on 21.9.2020, directed the petitioner to file reply to the show cause notice on or before 23.9.2020 and the same was filed. But without considering the reply and granting opportunities of personal hearing as stipulated in law and without granting examination or cross-examination of the persons whose statements had been recorded and relied upon, the original authority passed impugned order.

Issue –

• Whether there is violation of principles of natural justice in passing impugned order?

Order –

• The single bench of Hon’ble High Court observed that it is not in dispute that the personal hearing was granted on 13.4.2020 for the first time by the authority concerned. The petitioner averred that due to covid-19 did not allow the petitioner to represent its case before the authority concerned as the hearing was not virtual hearing. The second time the hearing rescheduled the date of hearing on 9.10.2020 was received by the petitioner on 9.10.2020 itself in the evening. To insist on someone to appear on that very day even if it was a virtual hearing would have been an impossibility.
• Further, it was observed that it is apparent from the Circular 1053/3/2017 dated 10.3.2017 where the board itself expects the officer concerned to avail opportunity of personal hearing with sufficient interval of time so that the noticee can avail the opportunity of being heard and the insistence on the part of the board for separate communications to be made to the noticee for each opportunity, there appears to be a clear breach.
• The Apex Court in the case of Andaman Timber Industries V/s Commissioner of C.Ex., Kolkata-II, reported in CDJ 2015 SC 1277 where cross examination of the witnesses was not granted has held that to be a serious flaw which made the order nullity in as much as it amounted to violation of principles of natural justice because of which the assessee was adversely affected.
• In the instant case, no such opportunity was granted and the aforesaid plea is not even dealt with by the Adjudicating Authority. As far as the Tribunal is concerned, the rejection of this plea is totally untenable.
• Hence impugned order set aside emitting the matter to the stage where it was left for the authority concerned to avail an opportunity within two weeks of the date of receipt of copy of this order.