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Issues:
Classification of M.S. rivets under Tariff Item No. 26AA or 68 for excise duty exemption; Violation of principles of natural justice in passing impugned order; Quasi-judicial nature of assessing authority's functions; Power of review under Rule 173B; Opportunity to be heard before modification of duty rate. Analysis: The petitioner, an engineering unit, sought excise duty exemption for M.S. rivets under Tariff Item No. 26AA, claiming they fall under the category of forged shapes and sections. Initially classified under Tariff Item No. 68, the petitioner later submitted a revised classification list, approved by the Assistant Collector, asserting the applicability of Tariff Item No. 26AA for exemption under Notification No. 75/67. However, the Assistant Collector modified the approval, leading to a retrospective demand for excise duty. The petitioner contended that M.S. rivets are forged products covered under Tariff Item No. 26AA, supported by a trade advice from the Central Board of Excise and Customs. The petitioner raised concerns over the violation of principles of natural justice, arguing that the Assistant Collector's decision was made without providing an opportunity to present their case. The petitioner emphasized reliance on the trade advice favoring their classification and cessation of duty collection post the initial approval. The petitioner's counsel highlighted the retrospective nature of the demand and the necessity for a speaking order addressing objections. The Central Government's Standing Counsel raised a preliminary objection regarding the availability of an appeal remedy, which the court rejected citing precedents. The court considered the quasi-judicial nature of the assessing authority's functions and the non-binding nature of trade advice. The court analyzed the applicability of Tariff Item No. 26AA, focusing on the first stage of production and the interpretation of relevant technical terms. The court emphasized the importance of principles of natural justice, especially when modifying duty rates post approval, and held in favor of setting aside the impugned orders due to the lack of a fair hearing opportunity. In conclusion, the court quashed Annexures 2 and 3, allowing the writ application with costs, emphasizing the need for a fair hearing before modifying duty rates and the importance of upholding principles of natural justice in quasi-judicial proceedings.
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