1995 (9) TMI 169 - AT - Central Excise

Issues Involved:
1. Violation of Principles of Natural Justice
2. Classification of Goods
3. Invocation of Longer Period of Limitation under Section 11A
4. Financial Hardship and Waiver of Pre-deposit

Detailed Analysis:

1. Violation of Principles of Natural Justice:
The appellant argued that the impugned order was violative of the principles of natural justice. The original adjudicating authority conducted a personal hearing on 23-2-1993 but did not pass any order for 1.5 years. The second adjudicating authority issued a notice on 15-7-1994, giving the appellant only two days to respond about their desire for a personal hearing. The notice for the subsequent hearing was sent to the appellant's factory in Pondicherry but not to their administrative office in Madras or their consultant. The appellant contended that the notice should have been sent to their consultant who had previously represented them. The Tribunal noted that the appellant did respond promptly to the notice and expressed a desire for a personal hearing. However, the notice was not received by the appellant's administrative office. The Tribunal found that in the interests of justice and fair play, one more opportunity should be given to the appellant, thus setting aside the impugned order and remanding the matter for reconsideration.

2. Classification of Goods:
The appellant classified their goods under Heading 8448 of the CET, whereas the department classified them under Heading 8483. The appellant argued that their goods, being parts of textile machinery, should be classified under Heading 8448 as they are used exclusively in textile machinery. The department contended that the goods were capable of general use and thus should be classified under Heading 8483. The Tribunal did not express an opinion on the merits of the classification issue but noted that the matter should be reconsidered by the original authority.

3. Invocation of Longer Period of Limitation under Section 11A:
The appellant argued that they were not guilty of suppression and thus the longer period of limitation under Section 11A of the Central Excises & Salt Act, 1944, should not be invoked. They claimed that they were under the bona fide impression that their goods were exempt from duty based on various notifications. The department argued that the appellant did not file the required declarations and thus the longer period of limitation was applicable. The Tribunal did not express an opinion on this issue but noted that the matter should be reconsidered by the original authority.

4. Financial Hardship and Waiver of Pre-deposit:
The appellant claimed financial difficulty, stating that they were a small-scale industry with a meager profit of Rs. 3 lakhs and a turnover of Rs. 69 lakhs during the year ending 31-3-1992. The Tribunal, considering the violation of principles of natural justice, granted a waiver of pre-deposit of duty and penalty and decided to take up the appeal itself.

Separate Judgments:
- Vice President's Judgment: The Vice President found that there was a violation of principles of natural justice and granted a waiver of pre-deposit, setting aside the impugned order and remanding the matter for reconsideration.
- Member (T)'s Judgment: The Member (T) disagreed, stating that there was no denial of principles of natural justice as the notice was sent to the appellant's factory. He directed the appellant to make a pre-deposit of Rs. 2 lakhs.
- Third Member's Judgment: The Third Member agreed with the Vice President, noting that the interests of justice and fair play required one more opportunity for the appellant. The impugned order was set aside, and the matter was remanded for reconsideration.

Final Order:
In view of the majority decision, the matter was remanded to the original authority for reconsideration of the issue in accordance with law.

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