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2018 (11) TMI 1757 - AT - Central ExciseClassification of manufactured goods - Compounded levy scheme - whether the goods manufactured by the appellant are classifiable as Chewing Tobacco (CT) under chapter heading 24039910, or whether as Zarda Scented Tobacco(ZST) under Chapter heading 2419930? - principles of natural justice - HELD THAT:- Perusal of various reports produced, indicates that all the chemical characteristics required for determination of products as to whether ZST or CT have not been discussed by the CRCL in its report. The CRCL has although considered the criteria of moisture content and total ash content but there are neither of ZST nor that of the CT as indicated in BIS specification specified in aforesaid paragraph. In such a circumstance, not permitting the re-test of the samples by the adjudicating authority is not correct and legal. The Central Board of Excise and Customs has published supplementary instructions under the Central Excise Act which in Chapter 8.1 to 8.4. mandates that in case of any assessee is not satisfied with the test result the same is required to be re-tested again by the CRCL. This has not been followed by the adjudicating authority in the present case. Hon’ble Allahabad High Court in case of Katyal Industries vs. Union of India [2013 (8) TMI 500 - ALLAHABAD HIGH COURT] held that if denial of statutory right for re-testing of the sample amounts of violation of principal of natural justice resulting into serious civil and criminal liability. Hon’ble High Court has further hold that re-testing, for which samples are specifically drawn by the Department in accordance with para 8.1 to 8.4 of instructions issued under Central Excise Rules, 2004 could not be denied to the petitioner. The Commissioner (Appeal) has not passed any order on merits of the case, and therefore, the same is non speaking. Merely, saying that a separate show cause notice has been issued by the Commissioner regarding classification of goods based on the test reports, as above is not appropriate and he should have pass the order as per various ground contained in the appeal memorandum. The Commissioner (Appeal) has treated part for the order as an administrative order regarding the capacity determination which is also illegal incorrect - It was incumbent upon the Commissioner (Appeal) to decide the entire issue contested before him in appeal as per the provisions contained in Section 35 of the Act. Therefore, the order passed by the Commissioner (Appeal) in respect of these cases is not sustainable and liable to be set aside. Appeal allowed - decided in favor of appellant.
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