No Fault Attributed to Authority in Central Excise Case Without Prejudice to Assessee: Supreme Court

Supreme Court: No fault on authority in central excise case if no prejudice to assessee. Ruling in Madura Coats Pvt Ltd v. Commissioner of Central Excise.

In a case under the Central Excise Act, 1944, the Supreme Court emphasized that the absence of prejudice to the assessee absolves the authority from fault. The Court addressed appeals against the Madras High Court's decision to remand a matter back to the Customs, Excise and Service Tax Appellate Tribunal (CESTAT).

Justices P.S. Narasimha and Aravind Kumar highlighted, "The High Court rightly observed that the absence of a letter claimed by the appellant does not prejudice their case... no fault can be attributed to the authority." Senior Advocate Shekhar Naphade represented the appellant, countered by Additional Solicitor General N. Venkatraman and Advocate V.C. Bharathi for the respondents.

The case involved an appellant company manufacturing various yarns. Upon suspicion of duty evasion, the excise department seized excess stock from their warehouse, leading to show cause notices (SCNs) and subsequent orders. Appeals filed with CESTAT resulted in orders set aside and remanded for fresh consideration.

After fresh adjudication by the excise authority, CESTAT again set aside orders, prompting the excise authority's application for rectification, later dismissed. Subsequent petitions for modification were also rejected. The High Court remanded the matter back to CESTAT, a decision upheld by the Supreme Court.

While affirming the High Court's findings, the Supreme Court reserved the appellant's right to present all arguments before CESTAT. The Court emphasized that although certain orders lacked legal sanctity, the matter's remand dissuaded setting aside the orders.