Customs, Excise and Gold Tribunal - Tamil Nadu
Commr. Of Cus. vs Bhanu Scientific Instrument Co. on 27 November, 1997
Equivalent citations: 1999(108)ELT702(TRI-CHENNAI)
ORDER T.P. Nambiar, Member (J)
1. This is an appeal filed by the department against the orders passed by the Collector (Appeals). In the impugned order, the Collector (Appeals) held that the original assessment under Heading 7017.10 of the Customs Tariff is correct in law and accordingly, he upheld the same.
2. In the appeal filed by the department, they have contended that this classification as was upheld by the Collector was not correct. In this connection, they have placed reliance on HSN Explanatory Notes to Chapter 70.
3. The learned SDR, drew our attention to the appeal grounds and reiterated the same.
4. We have heard the learned Consultant for the respondents. He also relied on the HSN Notes and stated that the orders passed by the Collector (Appeals) is in accordance with law. He also pointed out that these tubes which are imported by the appellants are ready for fitment to the laboratory equipments which are being manufactured by the appellants.
5. However, on a query from the Bench as to whether the basis on which he came to such a finding, he drew our attention to the impugned order passed by the Collector (Appeals), wherein, the Collector (Appeals) observed as follows :
"The appellants have produced literature showing that quartz tubes imported by them are utilised in making of Quartz Radiant Heaters manufactured in their factory. According to the leaflet, these heaters are for applications in Laboratory, Pharmaceutical and Chemical industry like heating of spectroscopy material and solvents without contamination, high temperature metal applications and material testing, semiconductor devices, diffusion welding stretching of foils, paint drying etc. It is said that the Quartz glass tubes imported in 1000 mm lengths and in different diameters of 25 x 28 mm; 27 x 30 mm etc., are directly utilised without any further fabrication work as a component part of quartz radiators. The literature produced shows that the appellants manufacture these radiators" in lengths of 1000 mm with heater dia varying from 4 x 6 mm and upto 100 mm. The appellants have produced evidence to show that they are an Small Scale Industry unit engaged in the manufacture of Laboratory and scientific Instruments such as all quartz double/triple distillation units, Infra red heaters etc. In view of the above, the original .assessment under Heading 7017.10 CTA/7012.10 CET is correct in law and accordingly upheld. The impugned order of the Lower Authority confirming the demand is set aside and the appeal is allowed in toto."
6. He, therefore, pointed out that all these leaflets as well as other documentary evidence were produced before the Collector (Appeals) and on the basis of the same, he has given the finding.
7. On a query from the Bench as to whether those leaflets and literatures which are produced by the respondents could be produced before us, he stated that the same is not in his possession.
8. We have considered the submissions of both the sides. It is now seen from the orders passed by the original authority that the original authority stated that the appellants did not ask for a personal hearing. A perusal of the orders of the original authority shows that certain technical leaflets were produced before him. But there is no mention as to whether any literatures were produced before the original authority. It is also seen from the orders passed by the learned Collector (Appeals) that he merely perused the literatures as well as leaflets and he recorded the arguments that were argued before him by the respondents. He merely stated that in view of the above arguments, the assessment under 7017 is correct.
9. In our view, when an argument is advanced before the Collector (Appeals), he should give his reasonings as to how the classification is to be done under 7017.10, in the light of those arguments. If he simply says that in view of the above it is classifiable under the above said heading, it is not a speaking order. We have held in several cases that when the adjudicating authority or Collector (Appeals) passes an order, that order must be a speaking order. The order on the face must show the reasons which weighed with him for coming to the conclusion that the assessment is under 7017.10. When he gives such a finding by referring to the several details in the literatures as well as the leaflets, by setting them out in the order and by looking into the proper headings and when he gives a reasoned order as an appellate order, we can find out whether the reasons so furnished by him are correct in the facts of the case and whether such reasons stands the test of law. These are the principles laid down by the Supreme Court in the case of Siemens Engineering Works v. C.C.E. reported in AIR 1976 S.C. 1186. In that particular decision, the Hon'ble Supreme Court held that giving reasoned finding is a part and parcel of the principles of natural justice. The Supreme Court had made it very clear that basically when such reasons are furnished by the authorities concerned, the appellate authority will be in a position to find out whether such reasons are to be drawn from the facts of the case and whether the conclusions in the light of those facts are in accordance with law.
10. In this case, the first infirmity in the order is that no such reasons are furnished. Therefore, there is violation of principles of natural justice. Secondly, it is seen that only the leaflets were produced before the Assistant Collector. The Assistant Collector with regard to the leaflets, merely held that the goods are classifiable as per the examination reports, the goods imported are mere glass tubes. His order also suffers from the infirmity of violation of principles of natural justice. The reasons are that he went by the examination report inspite of the fact that the appellants have produced a leaflet before him. When the respondents have produced a leaflet before him, he should have mentioned as to whether these leaflets pertain to the tubes or the equipment in which the tubes are going to be used. Without mentioning about the character of the leaflets and without discussing this leaflet, he focussed a finding on the basis of the examination report. He should have also referred to the HSN in this regard. The Customs Tariff is based on HSN as was held by the Hon'ble Supreme Court in the case of Wood Crafts Industries v. CCE reported in 1997 (95) E.L.T. 23 Para 18. Therefore, when his order suffered from the vice of violation of principles of natural justice, the Collector (Appeals) should have remanded back the matter. On the contrary, without remanding the matter to the Assistant Collector, the Collector (Appeals) himself decides the matter after taking another fresh evidence in the form of a literature. This, in our view, is not permissible in view of the decision of the Supreme Court reported in 1997 (22) RLT 650 in the case of CC, Calcutta v. Hanuman Trading Corporation and Anr., wherein, at Para 5 their lordships held as under:
"5. There is no controversy that the respondents did not avail of the opportunity before the authorities to adduce any evidence and it was only before the Tribunal that material was produced by the respondents/sole proprietor challenging confiscation and penalty. In the facts and circumstances of the case, we are satisfied that the course adopted by the Tribunal of permitting respondents to adduce evidence before it for the first time and then in proceeding to decide the case on merits on that basis was not correct. If the Tribunal was of the view that a fresh opportunity was required to be given to the respondents to adduce evidence and show cause in response to the notice given to the respondents, the appropriate course for adoption was to remit the matter to the Commissioner of Customs, Calcutta. For this reason alone, the Tribunal's order must be set aside."
11. It is thus seen that both the orders suffered from the violation of principles of natural justice. Even otherwise, these leaflets as well as the literatures have not been dealt and they are also not before us.
12. In this view of the matter, we have no other alternative except to remand the matter to the original authority for a de novo adjudication, in the light of our above observations, after granting a personal hearing to the respondents.
13. Accordingly, the impugned order is set aside and the matter is remanded back to the original authority.