2000 (2) TMI 620 - AT - Central Excise

Summary

Issues:
Classification of polyester cotton rove twisted yarn and nylon cotton rove twisted yarn under Central Excise Tariff Act, benefit of exemption Notification No. 271/86, violation of principles of natural justice.

Analysis:
The appeal in question arose from a dispute regarding the classification of polyester cotton rove twisted yarn and nylon cotton rove twisted yarn under the Central Excise Tariff Act. The appellants claimed classification under Heading 5607.90 along with the benefit of exemption Notification No. 271/86. However, the lower authorities directed classification under sub-heading 5606.00, denying the exemption and confirming demands for a specific period. The Commissioner (Appeals) accepted the party's contention based on a Chemical Examiner's test report and Fair Child's Dictionary, classifying the items under Heading 5402 of CETA and exempting them under Notification No. 53/87 dated 1-3-1987. This decision was challenged by the Revenue on various grounds.

The learned D.R. contended that the Commissioner (Appeals) exceeded the scope of issues by considering a different heading under 5402 of CETA, which was not originally raised. The Revenue submitted new test results and expert opinions not presented before the Commissioner (Appeals), arguing for a final decision by the Tribunal. The respondent company objected to deciding on merits based on this new material, citing a lack of opportunity to respond. They proposed remanding the matter for a fair consideration, provided they were given a chance to address the new evidence.

Upon careful consideration, the Tribunal found that the Commissioner (Appeals) introduced a new heading without giving the party a fair opportunity to respond, violating principles of natural justice. The fresh material presented by the Revenue, including expert opinions and test reports, was not disclosed to the respondents, further indicating a breach of natural justice. Therefore, the Tribunal set aside the impugned order and remanded the case for de novo consideration. The direction was given for all materials relied upon by the Revenue to be shared with the respondents for a fresh evaluation by the Assistant Commissioner, considering the contentions raised and the new evidence provided.

In conclusion, the appeal was allowed by way of remand to ensure a fair and comprehensive review of the classification issue, taking into account all relevant materials and allowing both parties an equal opportunity to present their case.