Full Judgment
Shri S.S. Kang, Vice President
Heard both sides.
2. Applicant filed this application for waiver of pre-deposit of duty of Rs.7,68,000/- along with interest and penalty. The applicants during the period in dispute were engaged in the processing of fabrics and filed a declaration on 02.8.1999 under the provisions of Rule 3(3) of Hot Stenter Independent Textile Processors Annual Capacity Determination Rules, 1998 declaring 4 chambers of their stenter. Thereafter the applicants stopped the business and surrendered their registration on 4.11.1999. A show-cause notice dated 22.8.2002 was issued demanding duty on the ground that the appellant had not paid duty as determined by the Commissioner of Central Excise under Hot Stenter Independent Textile Processors Annual Capacity Determination Rules, 1998. The adjudicating authority confirmed the demand and imposed penalty. The appellants filed an appeal before the Commissioner (Appeals) along with application for condonation of delay of 28 days in filing the appeal. The reasons in application for condonation was that the demand pertains to the period for the year 1999 and the appellant was out of business and surrendered their registration in November, 1999 and some time is taken place for searching the relevant documents. The Commissioner (Appeals) rejected the appeal as time barred on the ground that the appellants have failed to show the reasonable cause for condonation of delay and not filed the appeal on time.
3. The contention of the applicant is that the applicant paid proper duty during the period in dispute as per the declaration filed under the Hot Stenter Independent Textile Processors Annual Capacity Determination Rules, 1998 declaring the number of chambers as 4. The Revenue is demanding duty taking the number of chambers as 4.28 instead of 4 as declared by the appellants. The contention of the appellant is that the appellant had not received any show-cause notice therefore, not filed any reply to show-cause notice and not appeared before the adjudicating authority.
4. The appellant also relied on the decision of the Hon'ble High Court of Madras in the case of Beauty Dyers Vs. Union of India reported in 2004 (166) ELT 27 (Mad), whereby the Hon'ble High Court held that Rules in question are ultra vires. The appellant also pleaded financial hardship on the ground that the appellant is working with one logistic company and his monthly earning is only Rs.10,000/-.
5. Revenue relied upon the findings in the impugned order to submits that the appellant has not explained the declaration, therefore, the appeal be dismissed.
6. From the facts of the case, we find that the appellant has surrendered his registration with the Revenue on 4.11.1999 and the show-cause notice was issued on 28.2.2010. As per the appellant, the show-cause notice was not received and they have not appeared before the adjudicating authority. Appellant was out of business process and surrendered their licence in the month of November, 1999. Therefore, we find merit in the contention of the appellant that the appellant has shown sufficient cause for delay in filing the appeal before the Commissioner (Appeals). Further, we find that the show-cause notice was issued after surrender of the registration with Revenue authorities. Further, we find that the Hon'ble High Court of Madras in the case of Beauty Dyers (supra) held that the Rule in question is ultra vires. In these circumstances, the impugned order is set aside after waiving the requirement of pre-deposit and the matter is remanded to the adjudicating authority to decide the matter afresh after affording a reasonable opportunity of hearing the appellant.
7. The appeal is allowed by way of remand.