2011 (8) TMI 566 - AT - Central Excise

Principles of Natural Justice - exemption under Notification 287/86 dated 5.5.86 for product Rustolene Super Spray falling under Chapter 27 of the Central Excise Tariff. - Benefit of exemption denied without giving reasons - Three personal hearing, respondent didn t appeared - Held That - Matter remanded back to original authority to decide afresh after observing principles of natural justice . Respondents also directed to appear without fail.

Summary

Issues:
Appeal against denial of exemption under Notification 287/86 for product classification.

Analysis:
The case involved an appeal filed by the revenue against the denial of exemption under Notification 287/86 for a product called Rustolene Super Spray. The Assistant Commissioner initially denied the exemption, stating that the product was primarily a lubricant and not eligible for the exemption. The matter was remanded back for de novo adjudication by the Commissioner of Central Excise (Appeals) due to procedural irregularities. A show-cause notice was issued, and eventually, the Asst. Commissioner granted the benefit of the exemption. However, the Commissioner (Appeals) set aside the order citing a lack of cogent reasons for denial and non-observance of principles of natural justice. The revenue contended that the product's main function was as a lubricating oil and that the principles of natural justice were not violated as the respondent did not appear despite multiple opportunities for a personal hearing.

The Tribunal noted that the Commissioner (Appeals) had set aside the order due to procedural irregularities and lack of cogent reasons for denial of exemption. It was observed that the original authority had provided three opportunities for a personal hearing to the respondent, which were not availed. Therefore, the Tribunal remanded the matter back to the original authority for a fresh decision, emphasizing the importance of observing principles of natural justice and granting a hearing to the respondent. The respondent was directed to appear before the original authority without fail. To expedite the process, the adjudicating authority was instructed to decide the matter within four months from the receipt of the order.

In conclusion, the order in appeal was set aside, and the appeal was allowed by way of remand, with the Tribunal emphasizing the need for a fair and just process in determining the eligibility for the exemption under Notification 287/86 for the product in question.