1988 (7) TMI 298 - AT - Central Excise

Tribunal overturns order for procedural violations, remands case for reevaluation

The Tribunal set aside the impugned order due to violations of natural justice principles and failure to consider the appellants' request for a chemical ... Natural justice - Full opportunity to be heard not given Issues:1. Waiver of pre-deposit of duty and stay of recovery.2. Alleged violation of principles of natural justice in passing the impugned order.3. Classification of goods under Tariff Item 19 or 68.4. Adequacy of personal hearing provided to the appellants.5. Financial position of the appellants.Analysis:1. The appellants sought a waiver of pre-deposit of duty and stay of recovery of a substantial amount along with a penalty imposed by the Collector. The case involved allegations of clandestine removal of goods and suppression of production by the appellants, leading to the demand of significant duties and penalties.2. The appellants contended that the impugned order was passed in violation of principles of natural justice as they were not fully heard before the order was issued. They argued that personal hearing was not adequately provided, and the order was premature. The Tribunal noted the importance of ensuring due process and observed that the appellants had a valid plea regarding the classification of goods.3. The classification of goods under Tariff Item 19 or 68 was a crucial aspect of the case. The appellants argued that the goods should be classified under Tariff Item 68, which would exempt them from duty payment. They requested a chemical test to determine the composition of the goods, emphasizing the significance of the predominance of cotton or PVC in the fabric for correct classification.4. The appellants raised concerns about the adequacy of the personal hearing provided to them during the adjudication process. They claimed that they were not fully heard, and the Director (Pub) proceeded with the order without allowing them to make further submissions after the last hearing. The Tribunal found that the appellants were entitled to a fair hearing as per the principles of natural justice.5. The financial position of the appellants was also brought into consideration during the proceedings. The appellants presented their financial status to support their plea for waiver of pre-deposit, highlighting their modest profits and assets. The Tribunal acknowledged the appellants' financial situation but primarily focused on the procedural irregularities in the adjudication process.In conclusion, the Tribunal found the impugned order to be flawed due to the violation of principles of natural justice and the failure to consider the appellants' request for a chemical test to determine the classification of goods. The order was set aside, and the case was remanded for de-novo adjudication within a specified timeframe, emphasizing the importance of providing a fair hearing and following proper procedures in such matters.