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Issues:
Classification of products under Tariff Item No. 68 for duty calculation. Validity of the order and show cause notice challenged under Article 226 of the Constitution. Adoption of procedures prescribed under the Central Excise Act. Applicability of a Division Bench ruling in a similar matter. Requirement of evidence and material to support contentions. Detailed Analysis: The judgment revolves around the classification of products under Tariff Item No. 68 for duty calculation, challenged by the petitioners under Article 226 of the Constitution. The Assistant Collector of Central Excise, Bombay, had held that unprocessed Rayon multifold yarn and H.D.P.E. yarn fell under Tariff Item No. 68, attracting a duty of 5% ad valorem. The petitioners contested this classification, leading to the issuance of a show cause notice by the Superintendent of Central Excise. The petitioners amended their petition to challenge the validity of the notice as well, seeking relief based on it. The main issue raised during the final hearing pertained to the adoption of procedures prescribed under the Central Excise Act. The respondents argued that the petitioners had not followed the required procedures following the order and show cause notice. However, the petitioners relied on a Division Bench ruling in Garware Nylons Limited v. Union of India & others, which they believed favored their case. The petitioners contended that the ruling, along with other cases referred to in it, supported their position, rendering further departmental procedures unnecessary. The judgment analyzed the applicability of the Division Bench ruling in Garware Nylons' case to the present matter. It was noted that while there were observations favoring the excise authorities in the previous case, the overall judgment supported the petitioners' contentions. The judgment emphasized that the benefit of doubt should be in favor of the assessee, and the ruling in Garware Nylons' case supported the petitioners' arguments. A crucial aspect highlighted in the judgment was the lack of evidence and material presented by the petitioners to support their contentions. In contrast to the extensive evidence and affidavits provided in the Garware Nylons' case, the petitioners in the present case had not submitted any such documentation. The judgment stressed the importance of excise authorities having access to relevant materials to reach a fair decision. Consequently, the court set aside the impugned order and show cause notice, directing a fresh hearing with full opportunities for both parties to present their case with supporting evidence. In conclusion, the petition was allowed, and the impugned order and show cause notice were quashed. The matter was remanded to the excise authorities for a fresh hearing, emphasizing the need for evidence and a fair process. The judgment also addressed the petitioners' request for a refund and the requirement to furnish a bank guarantee in favor of the Collector of Excise, Bombay within a specified timeframe. The ruling made no order as to costs in the circumstances of the case.
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