1990 (3) TMI 193 - AT - Central Excise

Summary

Issues:
1. Eligibility for benefit of exemption under Notification No. 175/86.
2. Compliance with principles of natural justice in decision-making process.
3. Transfer of appeal to the Special Bench of the Tribunal.

Detailed Analysis:

1. The case involved the issue of eligibility for the benefit of exemption under Notification No. 175/86 for a small scale industrial unit. The appellants, as new entrants in the field, possessed a provisional small scale industry registration certificate before commencing production. They claimed to be a small scale unit registered under the Adityapur Industrial Area Authority and availing Modvat. Despite declaring the statutory rate of duty as 35% in the classification list, they had actually paid the exempted rate applicable to small scale industrial units. The Assistant Collector denied them the benefit under the notification as they had not explicitly claimed it and failed to submit the SSI registration certificate. The appellants contended that they were not given an opportunity to explain their position, and the decision was made ex parte. The Tribunal found that the appellants had a prima facie case for the benefit of exemption, considering their payment of the lower duty rate and the lack of opportunity for a personal hearing before the decision was made.

2. The issue of compliance with the principles of natural justice arose concerning the decision-making process. The Assistant Collector's denial of the benefit under the notification without granting the appellants a chance to present their case and explain their position was deemed a violation of natural justice by the Tribunal. It was observed that the approval of the classification list took time, and as the decision was adverse to the appellants, they should have been provided with a personal hearing before the order was passed. The Tribunal emphasized that the principles of natural justice must be adhered to in administrative proceedings to ensure fairness and procedural regularity.

3. Lastly, the Tribunal directed the transfer of the appeal to the Special Bench of the Tribunal in New Delhi for disposal. This decision was made because the appeal pertained to the admissibility of the exempted rate under Notification No. 175/86, which had been disallowed by the departmental authorities in favor of the statutory rate. As the matter fell within the purview of the Special Bench, the Tribunal ordered the transfer for appropriate adjudication by the concerned authorities in New Delhi.

In conclusion, the judgment addressed the issues of eligibility for exemption, procedural fairness in decision-making, and the transfer of the appeal to the Special Bench, ensuring that the appellants' rights were safeguarded and the case was adjudicated appropriately.