1987 (5) TMI 157 - AT - Central Excise

Summary

Issues:
1. Classification of acid oil under Central Excise Tariff.
2. Legality of initiating proceedings under Section 11A without proper notice.
3. Compliance with principles of natural justice in classification modifications.

Analysis:
1. The case revolved around the classification of acid oil under the Central Excise Tariff. The appellant had cleared acid oil without duty payment, claiming it was captively consumed and classified under Item 68. However, a show cause notice was issued based on a ruling classifying acid oil under Item 12, leading to the impugned order by the Collector of Central Excise (Appeals), Madras.

2. The appellant argued that the classification list approved earlier could not be changed without a proper show cause notice under Rule 173B of the Central Excise Rules, 1944. The Assistant Executive Officer contended that the department could not initiate proceedings under Section 11A without following due process. The Tribunal agreed, emphasizing the necessity of issuing a show cause notice and providing an opportunity to be heard before changing the classification to enforce duty recovery under Section 11A.

3. The Tribunal highlighted the importance of adhering to principles of natural justice in classification modifications. It cited precedents to support the requirement of giving the affected party a chance to contest the classification change. The judgment emphasized that the burden of proof lies with the Excise authorities to establish correct classification, necessitating a full-fledged opportunity for the manufacturer to present their case. The Tribunal concluded that the revision of classification without proper notice and opportunity for the appellant was legally untenable, leading to the setting aside of the impugned order and allowing the appeal.