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of <h1>Tribunal remands case for fresh adjudication, except on Anti-corrosion Paper, after setting aside order</h1> The Tribunal set aside the order, except for the Anti-corrosion Paper, and remanded the case for fresh adjudication. The original authority was directed ... SSI Exemption - Classification of papers - (i) Lacquered Release Paper, (ii) VPI (Anti-corrosion) Paper and (iii) Poly-coated (Plastic-coated) Paper. - The department issued 22 show-cause notices covering the entire period of dispute proposing to classify all the goods under SH 4811.30 and raising consequential demands of differential duty - Rule 173Q of the Central Excise Rules, 1944 - learned counsel for the assessee has reiterated the main grievance viz. that no opportunity of being heard was given by the adjudicating authority against 21 show-cause notices - Principal of natural justice - In case any of the Classification Lists had already been approved by the proper officer of Central Excise by the time the learned Commissioner (Appeals) took up the case for decision on merits, the assessee is bound by such classification in the absence of any statutory challenge thereto - Appeal is allowed by way of remand Issues Involved:1. Classification of products under the Central Excise Tariff Act.2. Demand of differential duty and imposition of penalties.3. Violation of principles of natural justice.4. Entitlement to exemption under various notifications.5. Remand for de novo adjudication.Detailed Analysis:1. Classification of Products:The assessee classified Lacquered Release Paper and VPI (Anti-corrosion) Paper under SH 4811.90 and Poly-coated (Plastic-coated) Paper under SH 4811.30 during the disputed period (1.4.1989 to 28.2.2000). The department issued 22 show-cause notices proposing to classify all products under SH 4811.30, leading to consequential demands of differential duty. The Additional Commissioner confirmed the classification under SH 4811.30 and denied exemption under Notification No. 49/87-CE dated 1.3.87.2. Demand of Differential Duty and Imposition of Penalties:The Additional Commissioner confirmed a demand of Rs 55,08,310/- for the period from April 1989 to February 2000 and imposed a penalty of Rs 10 lakhs under Rule 173Q of the Central Excise Rules, 1944. The Commissioner (Appeals) sustained the demand for Lacquered Release Paper and Poly-coated Paper but excluded Anti-corrosion Paper from the duty demand, reducing the penalty to 25% of the duty amount.3. Violation of Principles of Natural Justice:The main grievance of the assessee was the lack of opportunity to be heard against 21 out of 22 show-cause notices. The adjudicating authority only provided a hearing for the show-cause notice issued on 2.5.94. This violation of natural justice was noted by both the Hon'ble High Court and the Supreme Court. The Commissioner (Appeals) also failed to address this grievance adequately.4. Entitlement to Exemption under Various Notifications:The assessee claimed exemptions under several notifications, including Notification No. 49/87-CE, No. 20/94-CE, No. 85/95-CE, No. 8/96-CE, and No. 5/97-CE, for different periods. The Commissioner (Appeals) denied these exemptions, except for MODVAT credit on inputs used in the manufacture of Lacquered Release Paper. The assessee argued that if exemptions were denied, they should be allowed to pay duty at the tariff rate based on the classification claimed by the Revenue.5. Remand for De Novo Adjudication:The Tribunal found the case fit for remand due to the violation of natural justice and inadequate consideration of the assessee's submissions. The Commissioner (Appeals) lacked the power to remand but proceeded to decide the case on merits, which was not sustainable. The Tribunal directed the original authority to undertake de novo adjudication of all 22 show-cause notices, except for the dutiability of Anti-corrosion Paper, which was not challenged by the Revenue.Conclusion:The Tribunal set aside the impugned order, except for the finding relating to Anti-corrosion Paper, and remanded the case for fresh adjudication. All issues, except the dutiability of Anti-corrosion Paper, were left open for the original authority to decide after providing the assessee a reasonable opportunity of being heard. The Revenue's appeal was also disposed of accordingly.
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