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of <h1>Tribunal overturns denial of exemption for electricity, stresses procedural fairness</h1> <h3>ASSAM SAW MILLS AND TIMBER CO. LTD., CALCUTTA Versus COLLECTOR OF CENTRAL EXCISE, SHlLLONG</h3> ASSAM SAW MILLS AND TIMBER CO. LTD., CALCUTTA Versus COLLECTOR OF CENTRAL EXCISE, SHlLLONG - 1986 (23) E.L.T. 505 (Tribunal) Issues:1. Interpretation of Notification No. 52/78-CE regarding exemption for electricity generated for captive consumption.2. Denial of exemption by lower authorities due to inability to segregate electricity usage.3. Lack of opportunity for personal hearing leading to denial of natural justice.Analysis:Issue 1: Interpretation of Notification No. 52/78-CEThe appeal challenged the denial of exemption under Notification No. 52/78-CE for electricity generated for captive consumption. The appellants, engaged in plywood manufacturing, supplied a portion of the electricity generated to staff quarters and other purposes. The Advocate argued that the primary purpose of the generating unit was industrial use, with the secondary purpose being electricity supply to staff quarters. The notification allowed exemption for electricity generated for captive consumption, subject to the Assistant Collector's satisfaction. The Tribunal acknowledged the appellants' genuine case and emphasized a pragmatic approach to apportion electricity for industrial and non-industrial use.Issue 2: Denial of ExemptionThe lower authorities denied the exemption as they could not segregate electricity usage for industrial and non-industrial purposes due to the unavailability of suitable meters. The SDR contended that strict application of the exemption notification warranted denial since the Assistant Collector was not satisfied with the captive consumption. However, the Tribunal found the lower authorities' approach rigid and unjust, considering the appellants' explanation for the lack of segregation. The Tribunal emphasized the need for a common-sense approach in apportioning electricity and overturned the denial of exemption.Issue 3: Lack of Opportunity for Personal HearingThe Tribunal highlighted a procedural flaw in the adjudication process, noting the absence of an effective opportunity for the appellants to present their case before the Assistant Collector. The failure to provide a proper personal hearing infringed on the appellants' right to natural justice. The Tribunal stressed the importance of affording appellants a fair chance to be heard, as it could have influenced the Assistant Collector's decision regarding satisfaction under the exemption notification. The Tribunal directed authorities to ensure an effective right of personal hearing in the interest of justice.In conclusion, the Tribunal allowed the appeal, setting aside the orders of the lower authorities and directing the Assistant Collector to reconsider the matter, considering the Tribunal's observations and providing a personal hearing to the appellants to ensure procedural fairness and a just outcome.
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