Bhatter (Assam) Plantation and Spinning Mills Ltd. vs Union of India

K. Sreedhar Rao, Actg. C.J.

The appellant under the Industrial Policy, dated 24-12-1997 of Central Excise and the consequential notification, dated 8-7-1999, claimed exemption of Excise Duty on 100% Polyester yarn. The unit earlier was a co-operative unit, since the unit run into losses, the Government leased out the same to the appellant, which is a company, registered under the Companies Act. The Assistant Commissioner of Central Excise refused to grant exemption and levied Central Excise duty on 100% Polyester yarn on the ground that the unit is not a new unit and it is old one and the Industrial Policy does not apply to the unit, in question. Against the said order, the appellant filed an appeal before the appellate authority under the Act. The Commissioner allowed the appeal and set aside the demand raised by the Assistant Commissioner. The matter was taken to the Appellate Tribunal by the Revenue. It was held in the said proceeding that the Assistant Commissioner has not followed the rules of natural justice and that the demand raised is illegal. It was directed that the Assistant Commissioner should pass order after hearing the appellant, in question. Pursuant to the said order, the Assistant Commissioner again, without following the procedures of natural justice and without any opportunity of hearing issued the demand notices vide Annexures L, M and N, reiterating his earlier demand. Aggrieved by the said order, the present writ petition is filed.

It may be that the appellant has the alternative remedy of appeal; however, the matter is admitted and pending since 2005. At this stage, it may not be proper to direct the appellant to exhaust the remedy of appeal. The illegality committed by the respondents is palpably glaring. The notices are issued without giving opportunity of hearing and without complying with the order of the appellate authority as well as the order of Tribunal.

In that view of the matter, the impugned notices issued vide Annexures L, M and N are quashed.

The Assistant Commissioner is directed to hear the matter and pass order in accordance with law after giving opportunity of personal hearing. The appeal is accordingly disposed of.