Metropolitan Eximchem Ltd. vs Government of India

Rule. Rule made returnable forthwith. By consent, the petition is taken up for final hearing.

This petition is filed to challenge the ex parte order dated 14th July, 2011 passed by the Joint Secretary, Government of India u/s 35EE of the Central Excise Act, 1944 (''1944 Act'' for short).

In the present case, on 26th July, 2005 the finished goods lying in the factory of the assessee were destroyed in the floods. On 17th April, 2007 a show cause notice was issued calling upon the assessee to show cause as to why the duty on the said goods amounting to Rs. 6,66,640/- should not be recovered u/s 11A of the 1944 Act. During the pendency of the show cause notice, the assessee had made an application seeking waiver of duty which was rejected by the Commissioner on 12th March, 2008. Thereafter, adjudication order was passed on 31st March, 2008 wherein the duty demand was confirmed with interest and penalty.

Challenging the aforesaid order, the assessee filed an appeal before the Commissioner of Central Excise (Appeals) who by his order dated 26th October, 2009 upheld the Order-in-Original. The assessee, thereupon, filed a Revision Application before the Government of India and the Joint Secretary, Government of India by an ex parte order dated 14th July, 2011 rejected the revision application filed by the assessee. The ex parte order was passed on the ground that the assessee had repeatedly sought adjournments without any justification. On merits, the Revisional Authority held that the revision application cannot be entertained, because, the assessee had not challenged the order of the Commissioner, rejecting the application for waiver of duty.

The argument of the assessee is that even though the application for remission of duty was rejected by the Commissioner, the question as to whether the Revenue was justified in demanding the duty even before the damaged goods were cleared by the assessee, is the question which has not been considered by the Revisional Authority.

Since the damaged goods are claimed to be still lying in the factory of the assessee, whether the duty can be demanded is a question which has not been answered by the Revisional Authority. In these circumstances, in our opinion, it would be just and proper to set aside the ex parte order passed by the Revisional Authority and remand back the matter for fresh consideration.

Accordingly, the impugned order of the Revisional Authority dated July, 2011 (Exhibit 9 to the petition) is quashed and set aside, the matter is restored to the file of the Revisional Authority for fresh consideration in accordance with law. Rule is made absolute in the above terms with no order as to costs.