Duty demand and penalty cannot be restored when relied-upon documents were withheld and the case lacked documentary support.

Duty demand and penalty could not be restored where the assessee was not supplied the documents used to quantify the demand and was therefore denied a proper opportunity to defend itself. The alleged excess and shortage were found at the job worker's premises, not at the assessee's own premises, and the show cause notice rested mainly on oral statements rather than supporting documentary material such as job work challans. In these circumstances, a remand to allow the Department to build a fresh case on documents not previously disclosed was not justified at the appellate stage, and the Revenue's challenge failed.

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Issues: Whether the Revenue's appeal against the order dropping the duty demand and setting aside penalty was liable to be allowed where the assessee was not supplied the documents relied upon for quantification of duty and the alleged excess and shortage were detected at the job worker's premises.

Analysis: The Commissioner (Appeals) accepted that copies of the documents used to quantify the demand, including stock-related and challan records, had not been furnished to enable the assessee to defend the case. It was also noted that the excess and shortage were detected at the job worker's premises and not at the assessee's own premises. The show cause notice relied only on oral statements and did not rest on documentary evidence such as job work challans, so a remand for the Department to build a case on such material was not justified at the appellate stage.

Conclusion: The Revenue's challenge failed and the order dropping the demand and penalty was sustained.

Ratio Decidendi: A duty demand and penalty cannot be restored on appeal where the assessee was denied the documents necessary for defence and the demand was not supported by the documentary material sought to be introduced later.

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