Natural justice in confiscation proceedings requires hearing the supplier-owner before an adverse confiscation order is passed.

An adverse confiscation order cannot be sustained where the supplier and apparent owner of the goods was not given an opportunity of hearing before the order was made. The record showed that the supplier had earlier sought clearance of the goods on payment of duty or return of the goods, and the show cause notice itself referred to that claim, establishing its connection with the goods. On that basis, the affected party was entitled to be heard before confiscation was ordered. The order was therefore set aside for breach of natural justice and the matter was remanded for fresh decision after granting hearing.

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Issues: Whether the order of absolute confiscation was liable to be set aside for having been passed without affording the supplier of the goods an opportunity of being heard.

Analysis: The supplier had earlier written to the Department seeking clearance of the goods on payment of duty or their return, and the show cause notice also referred to the supplier's claim. The record therefore indicated that the appellant was the supplier and owner of the goods. In such circumstances, the appellant was entitled to be heard before an adverse order on confiscation was passed.

Conclusion: The impugned order was set aside for breach of the opportunity of hearing, and the matter was remanded to the Adjudicating Authority for fresh decision after granting hearing to the appellant.

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