Natural justice in remission proceedings requires a hearing and speaking order before rejection of duty relief.

A remission application under Rule 49 of the Central Excise Rules, 1944 had to be decided by the Commissioner as a quasi-judicial matter, so rejection without giving a reasonable opportunity of hearing and without a speaking order could not stand. Because the refusal affected the assessee's duty liability, compliance with natural justice was required, and communication of the rejection through a subordinate officer was not the procedure contemplated by the rule. The rejection was set aside and the matter was remanded for fresh decision after hearing the assessee and issuing a reasoned order.

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Issues: Whether the Commissioner could reject the remission application under Rule 49 of the Central Excise Rules, 1944 without granting a hearing and without passing a speaking order, and whether the matter should be remanded for fresh decision.

Analysis: The remission application was required to be decided by the Commissioner in exercise of a quasi-judicial function. A rejection of remission necessarily affects the assessee's duty liability and therefore had to comply with the principles of natural justice. The order was not passed after affording a reasonable opportunity of being heard and was not a speaking order. The rejection was merely communicated through a subordinate officer, which was not the procedure contemplated under the rule. In these circumstances, the impugned action could not be sustained.

Conclusion: The rejection of the remission application was set aside and the matter was remanded to the Commissioner to pass a speaking order after granting a reasonable opportunity of hearing to the assessee.

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