Sufficient Evidence on Dispatch of orders by Excise Dept: CESTAT upholds Excise Duty Demand [Read Order]

The Chennai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) quashed excise duty demand as there was sufficient evidence on dispatch of orders by the Excise Department.

The appellants having Central Excise registration are manufacturers of MS ingots. During the course of audit of books of accounts of the appellant for the period from September 2008 to September 2010, it was found that the appellant had taken credit on imported shredded scrap to the tune of Rs.24,01,371/- on the basis of photocopies of Bills of Entry. It appeared that the aforesaid documents were not eligible and valid documents to avail cenvat credit in terms of Rule 9(1) of CENVAT Credit Rules, 2004.

After due process of law, the original authority confirmed the demand of Rs.24,01,371/- for the above period along with interest and imposed equal penalty. The appellant preferred appeals before Commissioner (Appeals) who vide the impugned order rejected the appeals on the ground of time-bar. Hence the appellant is before the Tribunal.

The counsel for the appellant stated that the Commissioner (Appeals) had failed to appreciate that rejecting their appeal on the ground of limitation without a notice to them amounts to a violation of natural justice. That by not looking into the merits of the matter he had prejudiced their case as they had a strong case on merits.

It was further stated that although the department purports to have despatched the SCN and Order-in-originals to them as stated in departments letter C No I/10/09/2018-Legal dated 27/09/2021, they had not received the said documents and became aware of the same only after they received a recovery notice dated 14/06/2021. Their unit had closed its operations on 04/11/2015 and they had approached BIFR for rehabilitation, hence perhaps no documents sent by the Department were received by them.

A Single Bench of M Ajit Kumar, Technical Member observed that “The Department has by its letter dated 27/09/2021 demonstrated the despatch details of the letter for each document, postal acknowledgements have also been enclosed for some of the documents. Unlike the Appellants claim of ignorance of receipt of the impugned documents the Commissioner (Appeals) has shown that all the SCN’s were issued prior to the closure of the Appellants factory. Factual details and circumstances show the service of the impugned orders on the Appellant.”

“The inaction on their part bars the Appellant from claiming a remedy of filing an appeal almost a decade after the receipt of the earliest Order in Original No 06/2011–C.Ex. dated 16/03/2012, as evidenced by postal acknowledgement card, there by wrongly alleging non-receipt of orders and violation of the natural justice” the Tribunal concluded.

To Read the full text of the Order CLICK HERE

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