Natural justice and documentary compliance in refund claims: undisclosed grounds cannot sustain rejection, and Form D-3 is not an absolute condition.

A refund claim could not be rejected on a ground not disclosed to the assessee in the show-cause notice or earlier proceedings; reliance on an uncommunicated provisional-payment objection was procedurally unfair and contrary to natural justice, so that rejection could not stand. Form D-3 and the specified supporting documents were not an absolute pre-condition for duty relief under Notification No. 178/77 as amended; where originals were unavailable or copies were filed, the proper course was departmental verification of the records and the assessee's accounts. The assessment order was set aside and the matter remitted for fresh consideration in light of these principles.

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Issues: (i) Whether the refund claim could be rejected on a ground not disclosed to the assessee in the show-cause notice or earlier proceedings, and (ii) whether filing of Form D-3 and the particular supporting documents was an absolute prerequisite for duty relief under Notification No. 178/77 as amended.

Issue (i): Whether the refund claim could be rejected on a ground not disclosed to the assessee in the show-cause notice or earlier proceedings.

Analysis: The order rejected the claim partly on the basis that the duty payment was provisional, but that ground had not been communicated to the assessee at any stage before the order. A decision founded on an undisclosed ground was treated as unfair and procedurally defective. The appellate authority declined to undertake a fresh factual enquiry itself, noting that such a course would unduly prolong the matter.

Conclusion: The rejection on the undisclosed ground was held to be in breach of natural justice and could not be sustained.

Issue (ii): Whether filing of Form D-3 and the particular supporting documents was an absolute prerequisite for duty relief under Notification No. 178/77 as amended.

Analysis: The records showed that the assessee had produced the required documents, and if originals were unavailable or copies were filed, the proper course was verification by the department rather than outright rejection. The authority further held that Form D-3 was not an indispensable pre-condition for claiming the relief; the real requirement was satisfaction that the notification conditions had been fulfilled, which could be reached through enquiry into the assessee's accounts.

Conclusion: The documentary objection was rejected, and Form D-3 was held not to be an absolute prerequisite for the refund relief.

Final Conclusion: The assessment order was set aside and the matter was sent back for fresh consideration in accordance with the observations recorded.

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