M/S. NOBLE SYNTHETICS LTD. versus COLLECTOR OF CENTRAL EXCISE, BOMBAY

Citation: [2005] 2 S.C.R. 1003 · Decided: 17-03-2005 · Supreme Court of India · Bench: S.N. VARIAVA · Disposal: Dismissed

Judgment (excerpt)

MIS. NOBLE SYNTHETICS LTD. 
v. 
COLLECTOR OF CENTRAL EXCISE, BOMBAY 
MARCH 17, 2005 
[S.N. VARIAVA, DR. AR. LAKSHMANAN AND S.H. KAPADIA, JJ.] 
Central Excise Act, 1944-Section 11 A-Central Excise Rules, 1944-
Rules 56, 1738 and 173Q--Central Excise Tariff Act, 1985-Chapter Sub-
heading 3 906. 90 : 
Re-classification of products-Power of the adjudicating authority-
Assessee submitting technical opinions of Professors in support of its plea for 
re-classification-Adjudicating authority, without intimating the assessee, 
forwarding the opinions to Dy. Chief Chemist of the Department for his 
opinion-Held : The a/legation that the adjudicating authority forwarded the 
technical opinions to the Dy. Chief Chemist behind the back of the assessee 
is not tenable-The adjudicating authority has power to make such enquiries 
as necessary for adjudicating the given case. 
· Re-classification of product~-On request of the adjudicating authority, 
A 
B 
c 
D' 
Dy. Chief Chemist of the Department submitting test report on assessee 's E 
products -Non-supply of the report to assessee-Held : Did not amount to 
violation of the principles of natural justice or of R.56 as alleged, since the 
adjudicating,authority while holding against the assessee by disallowing re-
classification, did not rely on the said test report. 
Re;classification of products-Department discharged its onus to show F 
that the acrylic polymers manufactured by assessee were acrylic polymer 
resin in primary form falling under SI. No. 42 of the Schedule to the Notification 
No. 53188-They cannot be re-classified as emulsions falling under Sr. No. 9 
of the Schedule to the said Notification-Tribunal was right in rejecting the 
technical opinions submitted by assessee in support of its plea for re-
classification. 
G 
Appellant-assessee is a small scale unit engaged in manufacture of 
various grades of acrylic polymers. It filed classification lists classifying 
the aforesaid products as acrylic polymers in primary form under Chapter 
sub-heading 3906.90 claiming concessional rate of duty@ 40% ad valorem 
1003 
H 
1004 
SUPREME COURT REPORTS 
[2005] 2 S.C.R. 
A in terms of SI. No. 42 of the Schedule to the Notification No. 53/88 dated 
1-3-1988. But, subsequently claiming that there was a clerical error in 
filing the earlier classification lists, appellant filed a revised classification 
list seeking classification of the products as emulsions subject to rate of 
duty @ 20% ad valorem in terms of SI. No. 9 of the Schedule to the 
B Notificiation No. 53/88. 
The revised classification list was approved by the Assistant 
Collector. However, subsequently a show-cause notice was issued to the 
appellant alleging that the revised classification list was not in accordance 
with the circumstances as stated in Rule 173 B (4) of the Central Excise 
C Rules, 1944. The show-cause notice alleged collusion between the Assistant 
Collector, who approved the revised classification list and the appellant 
·and further proposed to demand a differential duty by invoking the 
extended period of limitation under proviso to Section 1 lA of the Central 
Excise Act, 1944. A proposal was also made to confiscate the land, building, 
plant and machinery under Rule 173 Q (2) of the Rules. The Collector 
D adjudicated the show-cause notice confirming the demand of differential 
duty and a penalty of Rs. 10 lacs. Building, land, plant and machinery 
were also confiscated. Tribunal dismissed the ~ppeal, but reduced the 
penalty from Rs. 10 lacs to Rs. 5 lacs. Hence the present appeal. 
In appeal to this Court, it was inter alia contended that in support 
E of its claim for re-classification, the appellant had produced technical 
opinions of Professors before the Collector; that the Collector had behind 
the back of the appellant forwarded those opinions to the Dy. Chief 
Chemist of the Department for his opinion and had also requested for test 
results of the appellant's products; that the action of the Department in 
F 
suppressing the test results of the appellant's products is in direct breach 
of Rule 56 whereunder the Department is bound to communicate the 
results of all tests to the manufacturer; that the principles of natural justice 
were also violated and the assessee was denied its right to fair hearing and 
an opportunity to rebut the Department's evidence; and that the Tribunal 
failed to appreciate that collusion being a serious offence, the burden of 
G proof 8hould have been str

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