Natural justice in Modvat credit disputes requires disclosure of relied-upon investigation reports before adverse adjudication.

Denial of Modvat credit was held unsustainable where the adjudicating authority relied on an investigation report that had not been supplied to the appellant. Reliance on undisclosed material deprived the appellant of a fair opportunity to meet the case against it and breached natural justice. As the defect went to the root of the adjudication, the order was set aside and the matter was remanded for de novo consideration after furnishing the report and hearing the appellant's submissions.

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Issues: Whether denial of Modvat credit could be sustained when the adjudicating authority relied upon an investigation report that was not supplied to the appellant, and whether the matter required remand for fresh adjudication.

Analysis: The order recorded that the lower authority had relied on the report of the Superintendent (Preventive) to doubt receipt of goods and the dealer's documentation. As no material showed that this report had been furnished to the appellant, the reliance placed on it without disclosure amounted to denial of a fair opportunity to meet the case against the appellant. The defect went to the root of the adjudication and required the matter to be reconsidered after supply of the report and consideration of the appellant's submissions.

Conclusion: The adjudication was vitiated for breach of natural justice. The order was set aside and the matter was remanded for de novo adjudication after furnishing the report to the appellant.

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