The Ahmedabad bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) directed re-adjudication for confirming the demand of Customs duty for manufacturing dutiable goods on job work basis without disclosing verification report.
Senor Metals Pvt Limited, the appellant assessee was engaged in the manufacture of brass articles as well as processing of raw materials or semi finished goods supplied by their principals on job work basis and also they were manufacturing dutiable goods on job work basis which were cleared by them without payment of duty in Domestic Tariff Area availing Notification.
The assessee appealed against the order passed by the Commissioner for reversing CENVAT Credit availed by the assessee and for the imposition of penalty.
Anand Nainawati, the counsel for the assessee contended that the Commissioner (Appeals) had travelled beyond the scope of show cause notice and had passed the order in gross violation of principles of natural justice.
Further submitted that the principal manufacturer availed exemption notification at his end will not make intermediate goods as exempted goods because it was well settled that goods cleared by the job worker operating under Notification are not exempted goods.
Ajay Kumar Samota, the counsel for the department relied on the decisions made by the lower authorities and contended that assessee was liable to pay the demand and the penalty imposed was as per the law and liable to be sustained.
The Bench observed that the adjudicating authority had travelled beyond the scope of the show cause notice and therefore, violated the principles of natural justice by not disclosing the verification report to the assessee and this clearly amounts to an act of violation of the principles of natural justice.
The two-member bench comprising Ramesh Nair (Judicial) and C.L Mahar (Technical) quashed the demand of Customs duty and the matter was required to be remanded to the First Authority to consider the same in accordance with law and on merits.
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