Excise Duty Remission Claim rejected without Stating valid Reason: CESTAT directs to decide Afresh

The Kolkata bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) directed the Commissioner to decide the case afresh since the order rejecting the Claim of excise duty remission failed to state the valid reason.

M/s. Techmens Chemical Private Limited challenged the Order-in-Appeal by which the Commissioner (Appeals) vide the said order has confirmed a duty demand of Rs.3,69,969/-

It was submitted that the present demand concerns a protective demand Show Cause Notice issued by the Department in a matter relating to certain goods destroyed in a fire incident at their factory on 18/10/2011.

He submitted that intimation in this regard was given to the Department on 19/10/2011 and the Department had undertaken a joint stock verification thereto on the same day. The Appellants followed up on their case for the remission of duty under Rule 21 of the Central Excise Rules vide their application dated 27/12/2011.

It was stated that they had reversed an amount of Rs.2,02,623/- on 27/09/2012 towards the credit availed on inputs contained in the finished goods, lost on account of the fire. They further reversed an amount of Rs.76,578/- due on account of interest and raw material/packaging material lost in the fire.

The Department issued a Show Cause Notice dated 06/11/2012 demanding duty under Section 11A(1) along with interest under Section 11AA with a proposal to impose a penalty under Rule 25 of the Central Excise Rules for non-payment of duty on 50.665 MT of Coal Tar Pich, 48,000 MT of Dehydrated Coal Tar, 7.580 MT of Creosote Oil & 30.365 MT of Anthracene Oil claimed to have been destroyed by fire on 18.10.2011,  and as also not being able to produce any order under Rules 21 ibid.

The appellants pleaded for 60 days to respond to the Show Cause Notice andsend a letter to the Jurisdictional Commissioner requesting/interalia to expedite their case for the remission of duty, on goods destroyed in the said fire. The department rejected their claim for remission of duty.

It was contended that the impugned communication communicating the Order of the Commissioner is without giving any reason and therefore such an order cannot be sustained.

 It was well-settled law that any order or decision of the quasi-judicial authority must be based on reasons. The order or decision without assigning any reason is a nullity, passed in gross violation of the principles of natural justice.

A Single member bench comprising of Mr Rajeev Tandon,(Technical) remanded the matter to the Adjudicating authority to decide afresh after considering the submission of the appellant and set aside the Order passed by the Commissioner (Appeal).

To Read the full text of the Order CLICK HERE

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