Remand for fresh adjudication where production capacity was enhanced without notice, technical report, or effective hearing.

The Tribunal noted that the scheme under Section 3A(4) of the Central Excise Act and Rule 96ZO(3) of the Central Excise Rules allows alternative procedures at the assessee's option. It found a substantial grievance that production capacity had been enhanced without a show cause notice, technical report, or effective hearing. On that basis, the matter was remanded for fresh adjudication so the dispute could be decided after a proper hearing and due consideration of the assessee's submissions.

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Issues: Whether the matter required remand for fresh adjudication in view of the assessee's grievance that capacity of production was enhanced without notice or effective hearing, and whether the adjudicating authority had to examine the assessee's entitlement under the alternative procedure.

Analysis: The Tribunal noted that the Supreme Court had indicated that the scheme under Section 3A(4) of the Central Excise Act and Rule 96ZO(3) of the Central Excise Rules provides alternative procedures at the assessee's option. It further noted that the appeal raised a substantial grievance that the capacity of production had been arbitrarily enhanced without issuing a show cause notice, without a technical report, and without affording an effective opportunity of hearing. In that situation, the proper course was to send the matter back so that the dispute could be decided afresh on a proper hearing and after considering the peripheral submissions.

Conclusion: The matter was remanded to the adjudicating authority for fresh decision after giving reasonable opportunity of hearing and considering the relevant submissions.

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