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Issues:
Challenge to excise duty demands based on yarn composition; Denial of cross-examination of authorities by Petitioner company; Setting aside of assessment order by High Court. Analysis: The Petitioner, a textile manufacturing company, challenged excise duty demands raised by the second Respondent for three different periods, totaling significant amounts. The dispute centered around the composition of the yarn being manufactured by the Petitioner, with the Department contending that the balance of the yarn contained man-made fiber of non-cellulosic origin, contrary to the Petitioner's claim. Reports from Chemical Analyser, Kandia, and Chief Chemist, New Delhi supported the Department's stance, prompting the Petitioner to request cross-examination of these authorities, which was denied by the Assistant Collector. The High Court, after hearing arguments from both sides, found that the Petitioner should have been allowed to cross-examine the authorities, especially considering the circumstances of the case. The Court emphasized that if the Petitioner was dissatisfied with the reports, their request for cross-examination should not have been rejected on the basis of alleged delaying tactics. Consequently, the High Court directed the Assistant Collector to permit the Petitioner to cross-examine the authorities on a scheduled date, with the expectation that the process would proceed without unnecessary delays. The High Court set aside the impugned assessment order and instructed the Assistant Collector to reevaluate the matter after the cross-examination, taking into account the existing evidence and any new evidence presented during the cross-examination. The Respondent's advocate suggested that if duty payment was eventually required, the Petitioner should furnish a bank guarantee for the amount. The Petitioner's advocate agreed to comply with any such requirement. Ultimately, the High Court ruled in favor of the Petitioner, setting aside the assessment order and directing a fresh decision by the Assistant Collector, while also absolving the Petitioner from bearing the costs of the legal proceedings.
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