M/S. Devi Crop Science (P) LTD vs. The Commissioner Of CGST And Central Excise

Held

The Court held that the impugned order violated the principles of natural justice. The Court found that the assessing authority had relied on a pamphlet of the writ petitioner for classifying the goods under Chapter 38. However, this pamphlet was not included in the show cause notice, nor was it a subject of discussion during the personal hearing. Introducing it for the first time in the final order amounts to taking the assessee by surprise, which is a clear violation of natural justice. Consequently, the Court quashed the impugned order. The Court did not go into the merits of the classification of goods, leaving the contentions of both parties open. The assessing authority was directed to grant a personal hearing to the petitioner on 05.04.2021, on which date the petitioner was to appear without further notice and present their contentions and relevant materials. The respondent was to independently consider these materials and pass orders in accordance with law. The Court explicitly stated that it had not gone into the merits of the matter.

Facts

M/s.Devi Crop Science (P) Ltd., a trader, importer, and manufacturer of fertilizers for export, filed a writ petition challenging an order passed by the Commissioner of CGST & Central Excise. The respondent authority had levied duty, interest, and penalty by classifying the petitioner's goods under Chapter 38 of the Central Excise Tariff Act. The petitioner contended that the goods should be classified under Chapter 31. The impugned order, dated 13.05.2020, was based on a pamphlet of the petitioner, which the petitioner argued was not included in the show cause notice or discussed during the personal hearing, thus violating principles of natural justice. The tax period is not explicitly stated, nor is the exact amount in dispute.

Key Issues

1. Whether the classification of goods under Chapter 38 of the Central Excise Tariff Act, as determined by the respondent, is legally sustainable, considering the petitioner's contention that they should be classified under Chapter 31? (Question of law) 2. Whether the impugned order dated 13.05.2020 violates the principles of natural justice by relying on a pamphlet that was not part of the show cause notice or discussed during the personal hearing? (Question of mixed law and fact) Petitioner's arguments: The petitioner argued that the classification under Chapter 38 is incorrect and the goods should fall under Chapter 31. More importantly, they contended that the reliance on a pamphlet, which was not provided in the show cause notice or discussed during the personal hearing, constitutes a violation of the principles of natural justice, as it took the petitioner by surprise. Respondent's arguments: The respondent authority argued that the issue of classification cannot be adjudicated in writ jurisdiction. They did not present arguments on the merits of the classification or the procedural fairness of the order.