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2018 (6) TMI 917 - AT - Central ExciseVires of Rule 3 of Hot Air Stenter Independent Textile Processors Annual Capacity Determination Rules (HASITPACD Rules), 1988 - principles of Natural Justice denied - Held that - All the judgments relied upon by the Ld. Counsel on the issue that Rule 3 of HASITPACD Rules, 1988 held ultra vires have not been considered by the adjudicating authority - Since this legal issue has not been considered by the adjudicating authority, it is in the interest of justice that the adjudicating authority first consider all the judgements cited by the Ld. Counsel as well as by the AR and pass a fresh order - appeal allowed by way of remand.
Issues:
Adjudication under Rule 95 ZQ (5) (ii) of Central Excise Rules, 1944 for the period November 1999 to November 2000; Interpretation of Hot Air Stenter Independent Textile Processors Annual Capacity Determination Rules, 1988 (HASITPACD Rules) in relation to duty demand; Consideration of various judicial precedents regarding the validity of Rule 3 of HASITPACD Rules, 1988; Recovery of duty under Section 3 of the Central Excise Act, 1944. Analysis: The case involved the confirmation of duty demand for a specific period under Rule 95 ZQ (5) (ii) of the erstwhile Central Excise Rules, 1944. The appellant's counsel argued that the demand was made under HASITPACD Rules, 1988, citing the Hon'ble Madras High Court's decision declaring Rule 3 of the said rules as ultra vires of Section 3A of the Central Excise Act, 1944. The appellant relied on multiple judgments to support this contention, emphasizing that if the machinery provision for levy of duty is ultra vires, no demand can be sustained. The appellant also presented various judgments, including those from the Supreme Court and other tribunals, to strengthen the argument against the demand. On the other hand, the Revenue contended that even if duty cannot be recovered under Section 3A, it could still be recoverable under Section 3 of the Central Excise Act, 1944. To support this argument, the Revenue relied on specific judicial precedents, including decisions from different tribunals. Upon careful consideration of the submissions, the Tribunal noted that the adjudicating authority had not addressed the legal issue regarding the validity of Rule 3 of HASITPACD Rules, 1988, as declared by various judgments cited by both parties. Therefore, the Tribunal deemed it necessary for the adjudicating authority to reconsider all the judgments presented and pass a fresh order specifically on the legal issue raised by the appellant. Consequently, the impugned order was set aside, and the appeals were remanded to the adjudicating authority for a fresh decision within a specified timeframe, emphasizing the importance of considering all relevant legal precedents cited during the proceedings.
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