Natural justice challenge fails where inspection and hearing opportunities were given, and penalty for clandestine clearance is sustained.

No violation of natural justice was found where the department stated that the disputed papers were not relied upon, allowed inspection and copying repeatedly, and fixed multiple personal hearings that the appellant did not attend. The challenge to the penalty therefore failed on the procedural ground. The penalty under Rule 209A was also sustained on the merits because the record indicated diversion of imported scrap without accounting and knowing facilitation of clandestine clearance by the consignee.

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Issues: Whether the penalty imposed under Rule 209A of the Central Excise Rules, 1944 was liable to be set aside on the ground of violation of natural justice and whether the appellant had made out a case for interference with the finding that it had facilitated clandestine clearance of goods.

Analysis: The appellant's grievance was that copies of relied-upon documents were not supplied and personal hearing was not effectively granted. The record showed that the Department had informed the appellant that the disputed documents were not relied upon and that copies could be taken. The appellant was repeatedly given opportunities to inspect and take copies, but did not avail them. Multiple personal hearings were also fixed, but the appellant failed to appear. On these facts, the refusal to interfere was treated as justified and there was held to be no violation of natural justice. The order also proceeded on evidence showing diversion of imported scrap without accounting and knowing facilitation of evasion by the consignee, so the basis for penalty was sustained.

Conclusion: The challenge based on natural justice failed and the penalty under Rule 209A was upheld.

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