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Arunodaya Mills Ltd. and anr. Vs. Union of India and anr. - Court Judgment

LegalCrystal Citation
SubjectExcise
CourtGujarat High Court
Decided On
Case NumberSpecial Civil Application No. 2002 of 1985
Judge
Reported in1985(6)ECC217; 1985(21)ELT390(Guj)
ActsCentral Excise and Salt Act, 1944 - Sections 3
AppellantArunodaya Mills Ltd. and anr.
RespondentUnion of India and anr.
Appellant Advocate Kamal Parsurampuria and; Yeshodhar Contractor, Advs.
Respondent Advocate S.D. Shah, Additional Standing Counsel
Excerpt:
central excise - tariff item--yarn--whether contained man-made fibre of non-cellulosic wastes or man-made fibre of non-cellulosic origin--evidence--report of experts obtained by department at assessee's instance--assesses feeling aggrieved with report and asking for cross-examination of authorities--decline of such request--completion of assessment and raising of demand--not correct--assesses to be afforded opportunity to cross-examine--central excises and salt act (1 of 1944), schudle i, item 18 iii(ii). - - at the instance of the petitioner company, reports from the chemical analyser, kandla as well as chief chemist, new delhi have been obtained;.....two reports bear out the case of the department. the petitioner company, therefore, prayed for cross-examination of the two authorities which was not granted. in spite of the application of the petitioner company to permit cross-examination, the request was not only heeded to but the assessment was made and the demands were raised which have been challenged in this petition. 2. having heard the learned advocates for both the sides, we are of the opinion that the second respondent ought to have permitted the petitioner company, particular in the facts and circumstances of this case, to cross-examine the two authorities. it is no doubt true that the department has obtained the opinion of those two authorities at the instance of the petitioner company. but if the petitioner company is.....
Judgment:

B.K. Mehta, J.

1. Rule. Mr. S. D. Shah waives service of Rule.

The Petitioner company which is a textile manufacturing company seeks to challenge by this Petition the order of the second Respondent dated February 23, 1985 raising three demands in the sums of Rs. 7,64,330.71 for the period from July, 1983 to January, 1984, Rs. 2,78,677.92 for the period from November 15, 1983 to June, 1984 and Rs. 1,84,504.18 for the period from July, 1984 to September 1984, towards the excise duty, under Tariff Item No. 18-III(ii). The grievance of the Petitioner company is that the yarn which it is spinning has predominant contents of man-made fibres of cellulosic origin and the balance comprises of non-cellulosic wastes. The case of the department is that the balance comprises of man-made fibre of non-cellulosic origin. This is in short the dispute between the parties. At the instance of the Petitioner company, reports from the Chemical Analyser, Kandla as well as Chief Chemist, New Delhi have been obtained; and both these reports affirm that the balance contains man-made fibre of non-cellulosic origin. In other words, these two reports bear out the case of the Department. The Petitioner company, therefore, prayed for cross-examination of the two authorities which was not granted. In spite of the application of the Petitioner Company to permit cross-examination, the request was not only heeded to but the assessment was made and the demands were raised which have been challenged in this Petition.

2. Having heard the learned advocates for both the sides, we are of the opinion that the second respondent ought to have permitted the Petitioner company, particular in the facts and circumstances of this case, to cross-examine the two authorities. It is no doubt true that the department has obtained the opinion of those two authorities at the instance of the Petitioner company. But if the Petitioner company is aggrieved with those reports, and if it asked for cross-examination of those two authorities, the Assistant Collector could not have rejected such a request on the ground that the Petitioner company is adopting delaying tactics. In the facts and circumstances of the case, we direct the Assistant Collector, Central Excise, Rajkot to permit the Petitioner company to cross-examine the aforesaid authorities on any convenient date which may be fixed by the Assistant Collector and which should be intimated to the Petitioner in advance. It is expected that the Petitioner company will render all assistance and will not ask for any adjournment. The Learned Advocate for the Petitioners has assured us that the Petitioners will not ask for any adjournment and they will proceed with the cross-examination of the witnesses. In the circumstances, the impugned assessment order is set aside and the Assistant Collector is directed to decide the question afresh in accordance with law after giving an opportunity to the Petitioners to cross-examine those two witnesses and after considering the evidence which is already on record and that may be adduced on cross-examination of the said two witnesses. Mr. Shah, the Learned Advocate for the Respondent states that in case the Assistant Collector passes the order holding the Petitioners liable to pay duty under Tariff Item No. 18-III(ii), the Petitioner company should furnish bank guarantee so as to secure payment of duty for which the demand is raised under the said assessment order, if any. Mr. Contractor, the learned advocate for the Petitioners states that the Petitioner company shall furnish a bank guarantee or a security as may be required by the Assistant Collector. Rule is accordingly made absolute by setting aside the impugned order and directing the Assistant Collector, Central Excise, Rajkot to permit the cross-examination of the aforesaid two witnesses as directed above and decide the matter afresh in accordance with law. There will be no order as to costs.


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