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Issues Involved:
1. Validity of the Show Cause Notice issued before final assessment. 2. Reliance on statements of third parties without cross-examination. 3. Limitation period for issuing the Show Cause Notice. 4. Claim for refund and interest on the differential duty deposited. Summary: 1. Validity of the Show Cause Notice: The petitioner contended that the show cause notice could not have been issued until the duty of excise had been finally assessed, citing Section 11A(3)(ii)(b) of the Act and relevant case laws. The court upheld this contention, noting that the duty was provisionally assessed and no final assessment had been made. Therefore, the condition precedent to the exercise of power u/s 11A(1) was absent, rendering the show cause notice issued on 27th June 1984 without jurisdiction. 2. Reliance on Statements of Third Parties: The petitioner argued that the respondents relied on statements of third parties who were not produced for cross-examination, thus vitiating the proceedings. The court acknowledged this point, referencing the Supreme Court's decisions in Kishinchand Chellaram and Phulbari Tea Estates, which emphasized the necessity of cross-examination to uphold principles of natural justice. The court clarified that in any future proceedings, the petitioner has the right to cross-examine witnesses whose statements are relied upon, unless this right is waived. 3. Limitation Period: The petitioner claimed that the proceedings were time-barred as they were initiated beyond the six-month period specified u/s 11A. The court found this contention irrelevant since the demand could not be raised until the final approval of the classification list, meaning the time had not begun to run under Section 11A. 4. Claim for Refund and Interest: The petitioner sought a refund of the differential duty amounting to Rs. 89,234.04 with interest at 12% per annum. The court agreed, stating that even if the amount was deposited voluntarily under a mistake, the petitioner is entitled to a refund with interest. The court directed the respondents to return the differential duty deposited by the petitioner with interest at 12% per annum. Conclusion: The court quashed the impugned show cause notice and all subsequent proceedings, allowing the respondents to take action against the petitioner regarding the Chromo Board only after finalizing the classification list. The court did not determine whether Chromo Board is duplex board. The respondents were directed to refund the differential duty with interest within two weeks from the date of communication of the order. The application was disposed of with no order as to costs.
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