1985 (5) TMI 55 - HC - Central Excise

Summary

Issues: Classification of blended spun yarn under Tariff Item 18 III (i) or (ii), violation of principles of natural justice in passing orders without adequate opportunity of hearing, challenge to the order of the Assistant Collector of Central Excise.

Analysis:

The judgment concerns a writ petition challenging the classification of blended spun yarn under Tariff Item 18 III (i) or (ii) by the Assistant Collector of Central Excise. The petitioner argued that their product does not contain man-made fiber of non-cellulosic origin, while the respondent contended otherwise. The petitioners alleged a violation of natural justice as they were not given a fair hearing, with the Assistant Collector failing to provide the chemical examiner's report or specify grounds for the classification under 18 III (ii). The Court noted that the matter involves questions of fact regarding the composition of the product, emphasizing the need for evidence and a detailed inquiry. The Court declined to make a finding on the issue and directed the parties to present evidence before the Assistant Collector for a proper determination.

The Court found that the Assistant Collector did not provide adequate opportunity to the petitioners and did not issue a show cause notice for the classification under 18 III (ii), leading to the quashing of the orders and consequential demands. The Court also addressed the administrative instructions issued by the Collector, emphasizing that the Assistant Collector must act in a quasi-judicial manner, independently assessing the facts and law without being bound by administrative directives. The judgment stressed the importance of the Assistant Collector's impartial consideration of the parties' arguments and reasoning in reaching a decision.

Consequently, the Court allowed the writ petition, quashed the Assistant Collector's orders, and directed a fresh decision after affording the petitioners a fair hearing. It was specified that demands would not be enforced until any appeal orders or stay applications were decided. The Assistant Collector was instructed to provide provisional clearance based on the petitioners' classification. The interim order was set to be vacated, ensuring a reevaluation of the classification issue with due process and consideration of evidence.