Ramesh Nair DECISION
Ramesh Nair, Member (J)
1. The brief facts of the case are that the appellant have defaulted the regular payment of duty thereafter the department frozen the bank account of the appellant and recovered the non paid duty, interest and penalty in terms of Rule 8(3A) of Central Excise Rules, 2002. In the present appeal the appellant challenged the imposition of penalty only.
2. Shri P.P. Jadeja Learned Counsel appearing on behalf of the appellant submits that the department has not followed the principle of natural justice in as much as no SCN was issued. He submits that there is no malafide on the part of the appellant, non-payment of duty at the relevant time is due to the Financial Crisis. The entire duty were declared in the invoice, ER-1 return therefore, when the case is of only delayed payment of Excise duty, no malafide is attributed to the appellant. He submits that without issuance of SCN, the recovery of the amount is in violation of principle of natural justice. He placed reliance on the following judgments:-
• DHARMAPAL SATYAPAL LTD
• VS. DY. COMMISSIONER OF C.EX., GAUHATI-MANU/SC/0615/2015 : 2015 (320) ELT 3 (SC)
• SIKKIM FERROYS ALLOYS LTD. VS. ASSITT. COMMR. OF C.EX., DIV.-EP, MUMBAI-I-MANU/MH/0961/2016 : 2016 (338) ELT 220 (BOM.)
• FRONTIER ALLOY STEELS LTD. VS. UNION OF INDIA-MANU/UP/3465/2016 : 2017 (354) ELT 54 (ALL.)
• PRINCIPAL COMMISSIONER OF C.EX. DELHI-I VS. SPACE TELELINK LTD-MANU/DE/4724/2017 : 2017 (355) ELT 189 (DEL.)
• VRAJESHWARI STEEL PVT. LTD. VS. COMMISSIONER OF C.EX.& ST., VADODARA-LL
• ALOM EXTRUSION LIMITED VS. DEPUTY COMMISSIONER, CENTRAL EXCISE-MANU/WB/0789/2017 : 2017 (353) ELT 431 (CAL)
• GSP INFRATECH DEVELOPMENT LTD. VS. UNION OF INDIA-MANU/KA/3871/2013 : 2015 (39) STR 945 (KAR.)
• ANARK ALUMINIUM LTD. VS. COMMR. OF C.EX. ST & US., VISAKHAPATNAM-II-MANU/CH/0088/2017 : 2017 (4) GSTL 248 (TRI. HYD)
• LAWSON TOURS AND TRAVESL (INDIA) P LTD. VS. DY. DIRECTOR, DGCRO, ZONAL UNIT, MUMBAI-MANU/MH/2726/2014 : 2015 (317) ELT 248 (BOM.)
• INDSUR GLOBAL LTD. VS. UNION OF INDIA-MANU/GJ/0957/2014 : 2014 (310) ELT 833(GUJ.)
• BABA VISHWAKARMA ENGINEERING CO. PVT. LTD. VS. CCE GHAZIABAD-MANU/CE/1057/2015 : 2017 (355) ELT 147 (TRI. DEL)
• COMMISSIONER OF C. EX., MUMBAI-II VS. CHOPRA ENGINEERING CO.-MANU/CM/0710/2014 : 2016 (339) ELT 423 (TRI.MUM)
• COMMISSIONER OF C. EX., CHANDIGARH VS. VALLEY IRON & STEEL CO. LTD-MANU/HP/0606/2016 : 2016 (337) ELT 1678 (H.P)
• PRATIBHA PROCESSORS VS. UNION OF INDIA-MANU/SC/0045/1997 : 1996 (88) ELT 12 (SC)
3. Shri. Dinesh Prithiani, Learned Assistant Commissioner (AR) appearing on behalf of the Revenue reiterates the finding of the impugned order. He further submits that the penalty in terms of Rule 8(3A) is mandatory and no discretion is available to authority either to reduce or waive the penalty therefore, appeal may be dismissed.
4. I have carefully considered the submission made by both the sides and perused the records. I find that the only challenge in this appeal is imposition of penalty under Rule 8(3A) of Central Excise Rules, 2002. I find that though the rule clearly prescribes the penalty however, the Revenue has not followed the principle of natural justice in as much as they have not issued any SCN and no opportunity was given to the appellant to defend or explain their case. It is a settled law that even though there is no explicit provision for issuance of SCN, as per the Principle of natural justice an assessee should be given sufficient opportunity to explain their case particularly for invocation of penal provision. In the present case admittedly neither SCN was issued to the appellant nor was any opportunity given. Therefore, in my considered view, the penalty is liable to be set aside only on the ground of principle of natural justice. Hence, I set aside the penalty and allow the appeal with consequential relief, if any, in accordance with law.
(Pronounced in the open court on 24.06.2022)
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