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Issues: Application for waiver of pre-deposit of duty and penalty; Violation of principles of natural justice in adjudication; Remand for compliance with natural justice principles.
In this case, the appellant filed an application for the waiver of pre-deposit of duty and penalty imposed by the Collector of Central Excise, North U.P., Meerut. The appellant, engaged in manufacturing kraft paper, was availing exemption under Notification No. 48/89-C.E. The department alleged that the appellant was wrongly availing the exemption by using less than 75% bagasse pulp in their product. The Collector relied on a report from the Sales Tax Department indicating that no bagasse had been purchased by the appellants during a specific period. The appellant argued that they had followed guidelines and that the change in the basis of the case during adjudication violated natural justice principles. The appellant claimed they did not receive the letter informing them of the information from the Sales Tax Department. The Tribunal found a violation of natural justice principles in the adjudication process. The basis for the Collector's findings differed from the show cause notice, and the appellant's claim of not receiving crucial information held weight. Consequently, the Tribunal set aside the order and remanded the matter to the Collector for a fresh adjudication, emphasizing the importance of providing the appellants with an opportunity to be heard regarding the information from the Sales Tax Department. The Tribunal held that the order passed in violation of natural justice could not stand, and directed the Collector to dispose of the matter in accordance with the law after affording the appellants a fair hearing. The appeal was remanded for compliance with the principles of natural justice.
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