Court overturns decision denying cement manufacturers tax exemption, citing lack of fair hearing.

The Court set aside the ex parte decision denying the benefit of Exemption Notification No. 36/87 to cement manufacturers, citing a violation of natural justice principles. The matter was remanded to Central Excise Authorities for a hearing on merits, instructing them to provide a fair opportunity for both parties to present their case. The Court emphasized adherence to the law in reaching a decision and directed prompt communication of the outcome, leaving all claims open and making no order as to costs.

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Issues:
1. Challenge to ex parte order denying benefit of Exemption Notification No. 36/87.
2. Violation of principles of natural justice in passing the ex parte decision.
3. Remand of the matter to Central Excise Authorities for hearing on merits.

Detailed Analysis:
1. The petitioners, cement manufacturers, challenged an ex parte order dated 27th March, 1987, passed by Central Excise Authorities denying the benefit of Exemption Notification No. 36/87, dated 1-3-1987. The petitioners contended that they were eligible for the exemption under the said notification as they had expanded their capacity as per the terms and conditions stipulated. The order was challenged on the grounds of violation of natural justice as no hearing was granted before the decision.

2. The Court noted that the ex parte decision rejecting the exemption was passed without affording the petitioners an opportunity of hearing, which was deemed a violation of principles of natural justice. The petitioners had filed a Writ Petition challenging the ex parte decision on the grounds of nullity due to lack of hearing. Additionally, a show cause notice issued during the pendency of the Writ Petition was also challenged on various grounds, leading to amendments in the petition.

3. The Court, after hearing both parties, decided to set aside the ex parte decision and remand the matter back to the Central Excise Authorities for adjudication on merits. The order directed the authorities to afford a reasonable opportunity of hearing to the parties, allowing them to make written submissions if necessary. The Central Excise Authorities were instructed to decide the matter in accordance with the law and communicate the order expeditiously. The judgment kept all claims and contentions of both parties open, ultimately disposing of the petition with no order as to costs.

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