1985 (4) TMI 306 - AT - Central Excise

Summary

Issues Involved:
1. Validity of the Show Cause Notice under Section 35A(2) of the Central Excises and Salt Act.
2. Acceptability of the Chemical Examiner's Reports.
3. Classification of Purity Barley and Robinson's Patent Barley under Tariff Item 1B and Notification No. 17/70.

Summary:

1. Validity of the Show Cause Notice under Section 35A(2) of the Central Excises and Salt Act:
The appellants contended that the show cause notice dated 25-7-1981 violated the provisions of Section 35A(2) as it relied on external reports of the Chemical Examiner not available in the record before the Assistant Collector. The Tribunal referred to Supreme Court decisions (AIR 1965 SC 1585 and AIR 1968 SC 843) which clarified that while initiating proceedings, the authority must rely on the record available. However, the Tribunal concluded that the Assistant Collector's order dated 14-5-1981 was passed without the Chemical Examiner's reports, making it valid for the Collector to initiate proceedings under Section 35A(2).

2. Acceptability of the Chemical Examiner's Reports:
The appellants argued that the reports were unsatisfactory and based on incorrect test memos. The Tribunal found no impropriety in the formulation of the test memos and held that the appellants had not exercised their right to cross-examine the Chemical Examiner. The Tribunal emphasized that the reports contained the necessary conclusions and were valid for the Collector to rely upon.

3. Classification of Purity Barley and Robinson's Patent Barley under Tariff Item 1B and Notification No. 17/70:
The Tribunal examined whether the goods fell under item 14 of the schedule to Notification No. 17/70, which exempts certain preparations with a basis of flour, starch, malt extract, or malted barley. The Tribunal concluded that:
- Purity Barley: Consists of barley powder and does not qualify as a "preparation with a basis of flour" or "starch." Hence, it does not fall under item 14 and is exempt from duty.
- Robinson's Patent Barley: Contains barley powder with added calcium and iron, qualifying it as a "preparation with a basis of flour." Therefore, it falls under item 14 and is dutiable.

Conclusion:
The Tribunal upheld the Collector's order regarding Robinson's Patent Barley but set aside the order concerning Purity Barley, allowing the appeal in part and modifying the Collector's order with consequential relief.