1. The present appeal is directed against the order dated 30-5-1980 passed by the Appellate Collector of Central Excise, Calcutta. By the impugned order the learned Appellate Collector confirmed the order dated 24-9-19 79 passed by the Assistant Collector of Central Excise, Dibrugarh.
2. Shri Mukherjee, the learned advocate for the appellants briefly narrated the facts of the case. He submitted that the appellants are engaged in the manufacture of plywood products. For this purpose they had put up i an electricity generating unit for industrial purposes.
However, as a welfare measure, a portion of the electricity generated was supplied to their staff quarters and for other similar purposes such as street lighting. The appellants had tried very hard to get the facility of suitable meters to record separately electricity used captively in the factory and the electricity supplied to staff colony and for similar purposes. Unfortunately, this was not possible. The appellants had sought exemption under Notification No. 52/78-CE, dated 1-3-1978, The learned advocate read out the notification. He submitted that it was clearly envisaged in the notification that the electricity generated for captive consumption was entitled to the benefit of the aforesaid notification. He submitted that no doubt the satisfaction of the Assistant Collector of Central Excise with regard to such use was provided for in the Notification. However, such satisfaction had to be done in a judicious and pragmatic manner. The appellants had explained the whole case to the lower authorities but they insisted that since no segregation of electricity consumed by the industrial unit and the staff quarters was possible, the appellants were not entitled for exemption on the entire electricity generated by them. The learned advocate pleaded that it was not in dispute that the primary purpose for putting up the generating set was to generate electricity for the appellants' manufacturing unit. It was only incidental or secondary purpose for which a portion of the electricity so generated was made available to the staff quarters. It was his prayer that the lower authorities could certainly work out some rough and just formula to apportion the electricity which could be taken for industrial use and the electricity diverted to other purposes. What the lower authorities had, in fact, done was to treat the entire electricity generated as falling outside the purview of the exemption notification. He pleaded that the appellants hada genuine case which called for suitable relief.
3. Smt. Dolly Saxena, the learned SDR submitted that the exemption notification had to be applied strictly and since the appellants had failed to satisfy the Assistant Collector with regard to the electricity captively consumed, the action of the lower authorities for denying the benefit to the entire electricity generated was justified.
4. We have heard both sides. We see lot of force in the submissions made by the learned advocate for the appellants. It is not in dispute that the appellants has put up the generating unit basically for their industrial requirements. Only a portion of the electricity generated was supplied to their staff quarters and other purposes like street lighting etc. We think that the Assistant Collector, on whom the task of satisfying himself in this regard was entrusted, adopted a very rigid view. Surely, by a pragmatic and common sense approach it was not difficult to come to a rough or broad apportionment of the total electricity generated for the two purposes. In any event, to us it appears unjust, prima facie, that in the absence of the meter facility, for which the appellants have put forth a satisfactory explanation, the entire benefit of the exemption notification should be denied to the appellants. In the result, we accept the appeal, set aside the order dated 30-5-1980 passed by the Appellate Collector and the Order dated 24-9-1979 passed by the Assistant Collector and direct that the Assistant Collector will re-decide the matter keeping in view the general observations made by us in the earlier part of this order. He will also afford an opportunity of personal hearing to the appellants.
5. Incidentally, it was also brought to our notice that there had been ab initio denial of natural justice because the Assistant Collector did not give an opportunity to the representative of the appellants before diciding the matter. The following portion from the Assistant Collector's order is relevant and is re-produced : "As prayed for, a personal hearing was granted at 1.30 P.M. of 24-9-1979. But, M/s. Assam Saw Mills & Timber Co. Ltd., Namsai could not appear before the Assistant Collector of Customs & Central Excise, Dibrugarh at the time fixed for personal hearing." From the above it would appear to us that no effective opportunity was given to the representative of the appellants to put forth their case before the adjudicating authority. Had this been done, we feel quite confident, the Assistant Collector would have arrived at his satisfaction, as enjoined by the Notification No. 52/78-CE, in a more judicious manner. In the interest of justice it should be the earnest endeavour of the authorities to make available to the appellants the right of personal hearing in an effective manner.