ORDER
K.S. Venkataramani, Member (T)
1. This is an application for waiver of a demand since quantified for Rs. 62,62,580/- in respect of fluorescent paper and paper board manufactured by the applicants herein. Since the appeal itself lies in a short compass and needs to be remanded for compliance with the principles of natural justice, we, on hearing both the parties granted stay and with the consent of the parties take up appeal itself for disposal.
2. The facts briefly are that the appellants were clearing fluorescent paper and paper board coated with china clay and other inorganic substances under Heading 4810.10 and 4810.90 w.e.f. 1-4-1989 on the basis of an approved classification by the Jurisdictional Assistant Collector. Proceedings were initiated against the appellants by a show cause notice dated 4-5-1992 for changing the classification of the goods to 4811.90 of the CETA, 1985. Learned Consultant, Shri C. Chidambaram appearing for the appellants referred to the respective Headings 48.10 and 48.11 CETA which read as follows :
"48.10 : Paper and paperboard, coated on one or both sides with
kaolin (china clay) or other inorganic substances, with or
without a binder, and with no other coating, whether or not
surface-coloured, surface-decorated or printed in rolls or
sheets.
48.11 : Paper, paperboard, cellulose wadding and webs of cellulose
fibres, coated, impregnated, covered, surface-coloured, sur-
face-decorated or printed, in rolls or sheets, other than
goods of Heading Nos. 48.03,48.09, 48.10 or 48.18".
The learned Consultant urged that the Department had drawn samples of the product and sent it for analysis by the Chemical Examiner. This is disclosed in para 8 of the order-in-original passed by the Jurisdictional Asst. Collector. The Asst. Collector thereupon proceeds in his order to hold, on the basis of the test report, that the goods are made of chemical pulp and coated on one side with fluorescent colour which is organic in nature. The Assistant Collector on this basis proceeds to conclude that the goods are classifiable under Heading 48.11 CETA. The grievance of the appellants herein is that the Department has not disclosed the text of the Chemical Examiner’s report and yet the conclusion in the report has been made use of by the Asst. Collector for determining the classification against them. The learned Consultant further pointed out that it may be noted that the Chemical Examiner’s report had been received even after the issue of the show cause notice in this case and yet it has not been disclosed to them at any stage during the adjudication proceedings. He pleaded that the appellants should be given a fresh opportunity to put forth their case on obtaining the full text of the Chemical Examiner’s report. This is because the Chemical Examiner’s report, according to the appellants, is silent on the other ingredients of the product viz., kaolin which will have a vital relevance to the classification of the product.
3. Shri J.P. Singh, learned DR contended that the appellants have had the opportunity of the first appeal before the Collector (Appeals). He referred to the detailed narration in the order of the Collector (Appeals) about the defence put forth by the appellants which according to the Department would show that the appellants apparently had suffered no difficulty in the absence of the text of the Chemical Examiner’s report with them.
4. We have carefully considered the submissions of both sides. We are inclined to agree with the learned Consultant that in this case there has been a failure to comply with the principles of natural justice because the Chemical Examiner’s report has not been referred to in the show cause notice at all and it has been made use of for the first time in the adjudication order of the Assistant Collector. It is also not clear whether as to what was the query raised to the Chemical Examiner and what was the aspect he was asked to test and report. The full text of the chemical examiner’s report is not available with either party and in these circumstances, the submissions made on this aspect of failure of natural justice in this case by the appellants has a lot of force. Accordingly, we set aside the impugned order and remand the matter back to the Jurisdictional Assistant Collector for determining the classification afresh between the two competing entries in the Tariff after furnishing the full text of the Chemical Examiner’s report on the product to the appellants herein and after giving them an opportunity of hearing and in accordance with law.