1992 (6) TMI 114 - AT - Central Excise

Summary

Issues: Violation of principles of natural justice in the order of the Collector

1. Facts and Background: The appellants, who manufactured cigarettes, were subjected to a Show Cause Notice proposing duty based on prices charged by wholesale dealers. The Director General's order determined the assessable value by adding additional money value considerations to the declared prices.

2. Contentions and Findings: The appellants argued that the additional consideration should only be added to the price, not the assessable value directly. The Director General's order and a Tribunal judgment supported this view. The Collector passed an order without fully hearing the appellants, violating principles of natural justice.

3. Legal Proceedings: The appellants challenged the additional demands raised by the Department in the Patna High Court, which quashed the demands due to the violation of natural justice. The Department's appeal is pending in the Supreme Court. Subsequently, a Show Cause Notice was issued by the Assistant Collector, leading to further disputes.

4. Challenges in Proceedings: The appellants raised jurisdictional issues and sought clarifications regarding the addition of additional consideration to the assessable value. The Patna High Court allowed contentions based on previous Tribunal judgments and government clarifications.

5. Collector's Order and Appeal: The Collector's order, passed without full hearing and consideration of relevant orders, was challenged by the appellants. The Tribunal found that the order violated principles of natural justice and remanded the case for de novo adjudication after hearing the appellants fully.

6. Conclusion: The appeal was allowed, setting aside the Collector's order and emphasizing the importance of providing a complete opportunity for personal hearing and considering all relevant submissions before making a decision.

This detailed analysis highlights the issues surrounding the violation of principles of natural justice in the Collector's order and the subsequent legal proceedings undertaken by the parties involved.