TaxTMI 
TaxTMI 
1992 (6) TMI 114
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....inciples of natural justice as they were not heard fully before passing the impugned order. In order to deal with the contention raised by the appellants, we have to refer to the facts in brief which are as follows :- 2. The appellants manufactured cigarettes. They cleared cigarettes manufactured at the appellants factory at Munger on payment of duty on the basis of prices declared and approved viz. wholesale price from the years 1-10-1975 to 28-2-1983. Thereafter, a Show Cause Notice was issued on 12-2-1982 proposing to treat the wholesale dealers as related persons of the appellants and to levy duty on the basis of the prices charged by the wholesale dealers and in the alternative treat certain expenses incurred by the wholesale dealer....
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.... paras. The operative portion of the Order reads as follows :- "To sum up the discussions and findings in the preceding paragraphs, - (a) the company and its WDs are not "related persons" within the meaning of Section 4(4)(c) of the Central Excises and Salt Act, 1944. (b) the price(s) at which the company sold the cigarettes to its WDs was not the sole consideration for sale; (c) the assessable value(s) of the cigarettes has to be determined in accordance with the provisions of Rule 5 of the Central Excise (Valuation) Rules, 1975. (d) for the purpose of determining the value under the said Rule 5 - (i) freight element (whether actual or equalised) cannot be added. (ii) similarly, cost of CFC cannot be added. (iii)....
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....ollector, Calcutta for the uniform implementation of the Order of the Director General. The exercise of revising the assessable value was undertaken in respect of other two factories of the appellants at Kidderpore and Parel although the Director General's Order covered only 3 factories. On the basis of the proceedings in the meeting on 17-7-1986, a demand of Rs. 1.12 crores was raised by the Department being differential duty arrived at in respect of Munger factory. In the meeting, it was decided that the additional consideration was to be added to the price originally declared by the appellants and assessable value arrived at by working backward from the aggregate of the price and the additional consideration. The appellants on 25-7-1986 ....
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....the Supreme Court. In pursuance of the directions of the Patna High Court, a Show Cause Notice dated 1-11-1990 was issued by the Assistant Collector of Central Excise, Patna seeking to recover Rs. 8.29 crores as additional duty by adding additional consideration directly to the assessable value. The appellants filed reply raising the jurisdictional issue and sought clarification. 4. In view of the fact that the Department is adding the additional consideration to the assessable value, the appellants filed a writ petition in Patna High Court challenging validity of the Show Cause Notice. The Patna High Court delivered the judgment holding that (a) Director General's order has not become final; (b) Since the issue was before the Collector ....
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....s contrary not only to the Order of the Director General but also to the Order of this Tribunal in VST Industries case. Before the Collector, they have raised these issues and on 30-12-1991 when the appellants were heard personally they have categorically requested the Collector for further opportunity of personal hearing if the/matter is to be proceeded with. They have also requested to convey the decision on the preliminary points raised by them before dealing with merits. On 30-12-1991, only preliminary issues were argued and the appellants have to substantiate their pleas on merits as well as jurisdictional issues. However, they were surprised to receive the Order dated 30-12- 1991 i.e. on the very same date on which there was a persona....
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....lector. 9. The question, therefore, is whether the Order of the Collector is vitiated for violation of principles of natural justice. 10. From the proceedings of the Collector, we find that the appellants have raised as many as 9 grounds disputing not only the correctness of the demands made in the Show Cause Notice but also raised objections to the jurisdiction of the Collector. In para 9 the Collector recorded as follows :- "Even the demand is not correct. It requires calculations. Original assessable value was wrongly calculated. Errors in calculations have to be examined. Directions may be issued." "Errors of methodology and not errors in calculations, is crux of the issue. Figures can be changed." They respectfully submitted that....