1991 (2) TMI 279 - AT - Central Excise

Summary

Issues:
- Denial of duty concession under Central Excise Notification
- Violation of principles of natural justice
- Interpretation of Explanation II to Notification No. 44/82

Denial of Duty Concession:
M/s. Rellonge Dye-Chem appealed against the denial of duty concession by the Assistant Collector, which was confirmed by the Collector of Central Excise (Appeals) Bombay. The denial was based on the aggregate value of clearances exceeding the limit of Rs. 15 lakhs as per Central Excise Notification No. 44/82. The Assistant Collector considered both Synthetic Organic Dyestuffs and Paints and Varnishes clearances for computing the total value, leading to the denial of the concession.

Violation of Principles of Natural Justice:
The appellant argued that the modification of the classification list without issuing a show cause notice violated the principles of natural justice. The Tribunal agreed, stating that the corrigendum issued by the Assistant Collector resulting in additional duty liability without a show cause notice was irregular. The fact that the appellant was heard before the order was passed did not mitigate this violation.

Interpretation of Explanation II to Notification No. 44/82:
The Tribunal analyzed Explanation II to Notification No. 44/82, which specified the computation of aggregate clearances. The Tribunal found that the lower authorities incorrectly interpreted the explanation. The explanation clarified that only clearances of the specific goods mentioned in the notification should be considered for computing the aggregate value. As Paints and Varnishes were not included in the specified goods, their clearances should not have been taken into account. By excluding the value of Paints and Varnishes clearances, the aggregate value of Synthetic Organic Dyestuffs fell below the limit of Rs. 15 lakhs, entitling the appellant to the duty concession.

In conclusion, the Tribunal set aside the previous order and allowed the appeal, providing consequential relief to the appellant based on the correct interpretation of the notification and the principles of natural justice.