The failure of a party to respond to a show-cause notice or attend personal hearings warrants a remand for de novo adjudication to ensure principles of natural justice are met and records are properly examined.

Per: S.K. MOHANTY

Heard both sides and examined the case records.

2. The learned Commissioner of Central Excise (Appeals), Mumbai- II, vide the impugned order dated 27.05.2015 has upheld the adjudication order dated 30.07.2014, wherein the original authority had imposed penalty under Rule 25(1)(d) of the Central Excise Rules, 2002 read with Section 11AC(1)(b) of the Central Excise Act, 1944 on the appellant. In support of imposition of penalty on the appellant, both the authorities below have held that only invoices were issued to the buyers, without actual supply of the goods to them. The appellant has assailed the impugned order on the ground that the first stage dealer from whom they had purchased the goods were not properly examined by the Department and thus, the charges of non-supply of goods cannot be alleged against the appellant.

3. On perusal of the case records, we find that the original order at paragraph 14 has referred to the statements recorded from Shri Hari Ram Gupta, Managing Director of M/s Petrolube India Ltd. (PIL), wherein he had deposed that only invoices were issued and no goods were supplied against those invoices. Further, at paragraph 16 in the original order, it has also been recorded that the appellant had neither filed any reply to the show-cause notice, nor appeared for personal hearing offered to them on 14.07.2014, 17.07.2014 and 21.07.2014.

4. On the contrary, the appellant has claimed that they had maintained adequate records to demonstrate that the goods were purchased from the first stage dealer under the cover of valid Central Excise invoices and the same were supplied along with the invoices to the buyers of the goods, who ultimately used such goods in further manufacture of excisable goods. Appellant has also contended that they had maintained RG-23D register on daily basis; and that they had also maintained adequate records and have filed periodic returns before the jurisdictional Central Excise authorities, claiming that as a second stage dealer, they had complied with the statutory requirements.

5. Considering the fact that the appellant did not file any reply to the show-cause notice and also did not appear for the personal hearing fixed by the original authority, we are of the view that the matter should go back to the original authority for re-examination of the documents/records etc. Therefore, by setting aside the impugned order, the appeal is remanded back to the original authority for proper fact-finding on the issues involved in the present matter. It is made clear that it is an open remand and appellant is at liberty to file their defense reply in pursuance of the show-cause notice issued by the Department. On the basis of the reply to be filed by the appellant, the original authority should complete the de novo adjudication proceedings. Needless to say that opportunity of personal hearing should be granted to the appellant before deciding the issue afresh.

6. In the result, the appeal is allowed by way of remand.