Natural justice requires hearing before applying an adjudication order to show cause notices; technical furnace finding was upheld.

The technical finding that the furnace was a pusher type furnace was upheld because the adjudicating authority had inspected the unit with technical experts and relied on supporting technical material, and no contrary material displaced that conclusion; the fixation of annual capacity and the resulting duty demand were therefore confirmed. However, where the adjudication order was applied to four show cause-cum-demand notices, the affected parties were entitled to an opportunity to reply and be heard before a speaking appealable order was passed; absence of that opportunity required de novo consideration on that limited aspect, and the matter was remanded to the jurisdictional Central Excise authorities.

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Issues: (i) Whether the furnace was a pusher type furnace and whether the fixation of annual capacity and demand of duty based on that finding were liable to be disturbed. (ii) Whether the applicability of the adjudication order to the four show cause notices could stand without prior opportunity to reply and hearing.

Issue (i): Whether the furnace was a pusher type furnace and whether the fixation of annual capacity and demand of duty based on that finding were liable to be disturbed.

Analysis: The adjudicating authority had inspected the unit with technical experts, examined the working of the furnace, and supported the conclusion with technical material and books. No material was found to dislodge that finding on the nature of the furnace.

Conclusion: The finding that the furnace was a pusher type furnace was upheld, and the fixation of annual capacity and demand of duty were confirmed.

Issue (ii): Whether the applicability of the adjudication order to the four show cause notices could stand without prior opportunity to reply and hearing.

Analysis: Since the show cause-cum-demand notices were proposed to be covered by the adjudication order, the appellants were entitled to an opportunity to reply and to be heard before a speaking appealable order was passed. The absence of such opportunity required fresh adjudication on this limited aspect.

Conclusion: The matter relating to the four show cause notices was remanded to the jurisdictional Central Excise authorities for de novo consideration after giving the appellants an opportunity to reply and be heard.

Final Conclusion: The challenge to the technical finding and duty determination failed, but the proceedings relating to the four show cause notices were set aside for fresh adjudication in accordance with natural justice.

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