An order passed in violation of the principles of natural justice is a nullity and cannot be the basis for a demand for differential duty.

The petitioner, Nuwood Pvt. Ltd., is engaged in the manufacture and sale of duplicating machines under the collaboration agreement with Boger Duplomat Apparate KG, West Germany. The duplicating machines manufactured by the petitioner are classified as office equipments for the purposes of Central Excises and Salt Act, 1944 (hereinafter referred to as the Act). In accordance with the provisions of the Act, the petitioner submitted a price-list for the equipment manufactured by it for the purpose of computation of excise duty payable thereon. The Assistant Collector of Central Excise, Madras by his order dated 25-9-1975 provisionally approved the price-list submitted by the petitioner and allowed clearance of the manufactured goods on payment of excise duty on the basis of the price list provisionally approved. Thereafter, on 18-12-1975 the Assistant Collector of Central Excise, Madras issued proceedings C-V/33, D/17-3-1975. By the said proceedings, the Assistant Collector fixed the value of the goods manufactured by the petitioner under Section 4 of the Act. The value so fixed was to take effect from 1-10-1974. By the said proceedings, the provisional approval accorded to the petitioner's price-list on 25-9-1975 was withdrawn. The said proceedings further stated that the petitioner sold 90% of the goods to Messrs Macneil and Magor Ltd., that the petitioner's goods were therefore nor ordinarily sold to independent buyers in the wholesale trade at the price declared in its price-list, that M/s. Macneil and Magor Ltd. were related persons for the purpose of valuation of the goods and that consequently the value of the goods for the purpose of duty should be deemed to be the normal price at which M/s. Macneil and Magor Ltd. sold the products to dealers.

2.On 12-1-1976, the petitioner enclosed a price-list as called for by the proceedings dated 18-12-1975 under protest and without prejudice to the rights to question the said proceedings. The said letter also stated that the Assistant Collector was not correct in holding that Messrs Macneil and Magor Ltd. were related persons of the petitioner. On 24-2-1976, the Superintendent of Central Excise, Madras, called upon the petitioner to pay the differential duty of Rs. 20, 057.82. On 29-3-1976, the petitioner informed the Superintendent of Central Excise that the petitioner was paying the differential duty under protest. The petitioner also called upon the Superintendent of Central Excise to let the petitioner know on what grounds the price list was finalised on 18-12-1975. The petitioner again wrote to the Superintendent of Central Excise on 8-4-1976, requesting him to furnish the petitioner the grounds on which the price-list was finalised. The petitioner then preferred an appeal to the Appellate Collector of Customs and Central Excise on 23-6-1976. By his order dated 4-11-1976, the Appellate Collector dismissed the appeal as time barred. A further revision filed before the Government of India by the petitioner was also dismissed on 5-12-1977. Thereafter the petitioner received a communication from the Superintendent of Central Excise on 25-3-1978, calling upon the petitioner to pay the differential duty of Rs. 20, 057.82. In these circumstances, the petitioner has filed this writ petition to quash the order dated 25-3-1978.

3.Mr. Mylsami, the learned Counsel for the petitioner contended that the petitioner had submitted a price-list in respect of the goods manufactured by it to the respondents for the purpose of computation of excise duty. By the order dated 25-9-1975 the Assistant Collector of Central Excise accepted the price list as provisionally approved the petitioner was paying the excise duty. However, by the proceedings dated 18-12-1975, the Assistant Collector took the stand that the petitioner was selling 90% of its products to Messrs Macneil and Magor Ltd. that M/s. Macneil and Magor Ltd. were related persons of the petitioner and that consequently the price of th