2005 (10) TMI 566 - HC - Central Excise

Court quashes product classification change order due to lack of due process.

The court quashed the order changing the product classification without due process, as the respondent failed to provide an opportunity for a hearing or ... - Issues: Challenge to order changing product classification without due process.Analysis:The petition challenged a communication seeking to alter the classification of a product without following due process. The petitioner, engaged in manufacturing optical fiber cable, argued that the respondent had not provided an opportunity for a hearing or issued a show cause notice before changing the classification. The petitioner was registered under the Central Excise Act and used raw materials, some of which were exempt from customs duty. Despite ongoing investigations and incomplete inquiries, the respondent issued the impugned orders. The respondent, through an affidavit, admitted that statements were recorded without providing copies to the petitioner, breaching principles of natural justice.The Court emphasized that without supplying adverse material to the petitioner and granting an opportunity to respond, no adverse order could be made. The respondent failed to demonstrate issuing a show cause notice or allowing the petitioner to be heard before the impugned orders were issued. Since investigations were ongoing and no statements were shared with the petitioner, the orders were deemed to be in violation of natural justice principles. Consequently, the Court quashed both the order dated 25/8/2005 and the subsequent communication dated 26/9/2005. The petition was allowed, costs were awarded to the petitioner, and direct service was permitted.