Natural justice requires fresh examination where stock discrepancy explanations are rejected without testing the factual defence.

A remand was held appropriate where the lower authorities rejected the assessee's explanation for alleged stock shortages and excess finished goods without testing its factual basis. The explanation linked the excess and shortage to the manufacturing process and to non-entry in statutory records due to the absence of the excise clerk. Summary rejection of that defence, without findings on the underlying assertions, was inconsistent with natural justice and fair play. The matter was therefore sent back to the original authority for de novo examination, fresh findings, and a reasonable opportunity of hearing.

---

---

Issues: Whether the matter required remand for fresh consideration because the explanation offered for the alleged shortages and excess stock was not examined by the lower authorities.

Analysis: The appellants' explanation was that the excess finished goods and the shortage of raw material were interconnected and arose from the manufacturing process, with entries in the statutory records not being made due to the absence of the excise clerk. This explanation was not tested on merits by either the original authority or the Commissioner (Appeals), who treated it as untenable without recording findings on the factual assertions. Such summary rejection without proper examination of the defence was contrary to the requirements of natural justice and fair play.

Conclusion: The matter was rightly remanded to the original authority for de novo examination and fresh findings after giving the appellants a reasonable opportunity of hearing.

---