Ravi Krishan Kapur,J. - (1.) The petitioner has assailed a proceeding initiated under Section 14AA of the Central Excise Act ("the Act"). In particular, the petitioner challenges the notices dated 27 November, 1997 issued under Section 14A of the Act and dated 28 November, 1997 issued under Section 14AA of the Act and the consequential actions taken pursuant thereto.
(2.) The primary grievance of the petitioner is that the impugned proceedings have been initiated without giving the petitioner an opportunity of hearing. It is submitted on behalf of the petitioner that in initiating the impugned actions the respondent authorities have not adhered to the principles of natural justice and no hearing has been afforded to the petitioner. It is further submitted on behalf of the petitioner that no subjective opinion regarding invocation either under Section 14A or under Section 14 AA of the Act has been recorded in the impugned notices. As such, there are no reasons in the impugned orders. It is also submitted on behalf of the petitioner that the retrospective operation of the sections in question is not permissible in law and in any event the respondent could not have sought to open the records of the petitioner company since 1986.
(3.) On behalf of the respondent authorities, it is submitted that the object of section is to defend the interests of the Revenue. It is further submitted on behalf of the respondent authorities that there is nothing in Section 14AA which prevents the reopening of the records of a previous year. It is also submitted on behalf of the respondent that the Central Excise Authorities have the full power to scrutinize and assess the records of the assessee and to form an opinion of under valuation and MODVAT utilization. It is also submitted on behalf of the respondents that Sections 14A and 14AA do not mandate providing information to the assessee before conducting a special audit. Moreover, the grounds for conducting an audit are in the file of the Department and the Department is not required to disclose the same to the assessee. In any event, according to the respondent authorities, there is no right of hearing afforded to the assessee before the audit is completed.;