Natural justice in adjudication requires disclosure of adverse enquiry material before it is used against the assessee.

Adverse material relied upon in adjudication must be disclosed to the assessee before it is used against it; otherwise the order is vitiated for breach of natural justice. The dispute arose from denial of deemed credit on aluminium ingots after departmental enquiry material, obtained on an earlier remand, was not furnished to the assessee. Because the assessee could not effectively rebut undisclosed findings, the adjudication could not be sustained. The impugned orders were set aside and the matter was remanded to the original adjudicating authority to supply the enquiry material, hear the assessee, and pass fresh orders.

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Issues: Whether the adjudication could be sustained when the department relied on enquiry material not supplied to the assessee, and whether the matter required remand for fresh consideration after disclosure of such material.

Analysis: The dispute concerned denial of deemed credit on aluminium ingots and the adjudicating authority's reliance on departmental enquiries conducted pursuant to the Tribunal's earlier remand. The decisive material used against the assessee was not furnished to it, preventing effective rebuttal. Where adverse material is relied upon, fairness requires disclosure so that the affected party can meet it. Failure to supply the enquiry findings amounted to a serious breach of natural justice, and the appellate authority wrongly sustained that defect.

Conclusion: The orders were set aside for violation of natural justice and the matter was remanded to the original adjudicating authority to furnish the enquiry material to the appellant, hear its submissions, and pass fresh orders.

Final Conclusion: The decision nullified the impugned adjudication and restored the matter for de novo consideration after disclosure of the material relied upon.

Ratio Decidendi: Adverse material relied upon in adjudication must be disclosed to the affected party before it is used against that party, failing which the order is vitiated for breach of natural justice.

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