Full Judgment
2. The appellant, during the material time, was engaged in the manufacture of Synthetic Organic Dyestuffs and Synthetic Organic Derivatives falling under Item 14D of the Central Excise Tariff Schedule (the "CET" for short) and Paints and Varnishes falling under Item 14 ibid.
3. By his order dated 26-2-1983, the Assistant Collector confirmed the denial of the duty concession in terms of Central Excise Notification No. 44/82 dated 28-2-1982, as set out in the corrigendum dated 20-11-1982 to the approvals earlier conveyed to classification lists 1/82 and 2/82 of the claim. The appellant protested against this revision of the approval earlier accorded, without issue of a show cause notice in breach of the principles of natural justice. The appellant was heard by the Assistant Collector when again the aforesaid objection was pressed. However, the Assistant Collector came to pass the aforesaid order dated 26-2-1983 in which he recorded that he was not impressed by appellant's argument that a modification of a classification list could not be made without issue of a show cause notice. On merits, he held that in terms of Explanation II to Notification No; 44/82, the value of clearances of goods other than Synthetic Organic Dyestuffs would also have to be taken into account for computing the aggregate value of clearances. On this basis, he found that the appellant had crossed the limit of Rs. 15 lakhs in the year 1981-82 (arrived at by aggregating the clearance value of Rs. 10,21,867.00 in respect of Synthetic Organic Dyestuffs and Rs. 7,48,641.25 in respect of Paints and Varnishes, making for a total of Rs. 17,70,508.25). Consequently, he held that the conditions laid down in the notification not having seen fulfilled, the appellant was not entitled to its benefit. In appeal, this order was upheld.4. The appellant was not represented at the hearing and had expressed its inability to be present. We have accordingly perused the record and heard the Senior Departmental Representative, for the respondent-Collector.
5. In our opinion, the modification of the earlier approval of the classification list by issue of a corrigendum which resulted in additional duty liability of the appellant without issue of a show cause notice amounted to violation of the principles of natural justice and this irregularity could not have been mitigated by the fact that the order of the Assistant Collector was passed after hearing the appellant. That apart, in our opinion, the construction put by the lower authorities on Explanation II to Notification No. 44/82 is not correct. The said Explanation reads as follows: Explanation II. - For the purpose of computing the aggregate value of clearances under this notification, the clearances of the said goods which are exempted from whole of the duty of excise leviable thereon by any other notification issued under sub-rule (1) of rule 8 of the Central Excise Rules, 1944 and for the time being in force, shall not be taken into account but the clearances, if any, in respect of which any exemption has been availed of under the notification of the Government of India in the Ministry of Finance (Department of Revenue) Nos. 80/80-Central Excise, dated the 19th June, 1980 and 43/82-Central Excise, dated the 28th February, 1982 shall be taken into account." It is apparent from the Explanation that the value of clearances referred to therein are of the "said goods" and the expression "said goods", as may be seen from the opening paragraph of the notification, refers to Synthetic Organic Dyestuffs and Synthetic Organic Derivatives falling under Item 14D, CET. Therefore, the clearances of any other goods, in the present case Paints and Varnishes, would not be clearances of the "said goods" and the value of such clearances should not be taken into account. From the show cause notice dated 19-4-1983, it is apparent that the value of clearances of goods falling under Item 14 have also been taken into account in computing the aggregate value of clearances. Once this value is excluded, it is seen that the aggregate value of clearances of goods falling under Item 14D was well within the stipulated limit of Rs. 15 lakhs. In this view of the matter, we set aside the impugned order and allow the appeal with consequential relief to the appellant.