Natural justice and classification evidence require de novo adjudication; Anti-corrosion Paper stays outside the duty demand.

Substantial show-cause notices were decided without granting the assessee a reasonable opportunity of hearing, and the adjudicatory record did not properly consider the classification lists, tariff changes, and test reports; the matter was therefore remanded for de novo adjudication. Anti-corrosion Paper was excluded from the duty demand because the notices did not allege that it was plastic-coated, and that unchallenged finding was left undisturbed. The result was a fresh decision on all remaining issues, with the exclusion of Anti-corrosion Paper continuing in favour of the assessee.

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Issues: (i) Whether the adjudication and appellate orders could be sustained when 21 out of 22 show-cause notices were decided without granting the assessee a reasonable opportunity of hearing and without proper consideration of the material on classification and test reports; (ii) Whether Anti-corrosion Paper could be brought within the duty demand in the absence of any allegation in the show-cause notice that it was plastic-coated.

Issue (i): Whether the adjudication and appellate orders could be sustained when 21 out of 22 show-cause notices were decided without granting the assessee a reasonable opportunity of hearing and without proper consideration of the material on classification and test reports.

Analysis: The assessee was heard only in respect of one show-cause notice, while the remaining notices were adjudicated behind its back. The record also showed that the appellate decision did not adequately examine the status of the classification lists, the changes in tariff sub-headings over the relevant period, and the several test reports relied upon by the assessee. In these circumstances, the matter required fresh adjudication after the assessee was given a full opportunity to respond and place material on record.

Conclusion: The impugned order could not be sustained on merits and the matter was required to be remanded for de novo adjudication.

Issue (ii): Whether Anti-corrosion Paper could be brought within the duty demand in the absence of any allegation in the show-cause notice that it was plastic-coated.

Analysis: The appellate finding excluded Anti-corrosion Paper from the demand on the ground that the show-cause notices did not allege that it was plastic-coated. That finding was not challenged by the Revenue and therefore was to remain undisturbed.

Conclusion: Anti-corrosion Paper remained outside the scope of the duty demand.

Final Conclusion: The matter was remitted for fresh decision on all issues other than the dutiability of Anti-corrosion Paper, which stood concluded in favour of the assessee.

Ratio Decidendi: An adjudication cannot be sustained where substantial show-cause notices are decided without hearing the assessee and without proper consideration of relevant classification material, test reports, and declared classification lists; such a defect warrants de novo adjudication, while an unchallenged finding excluding a product from demand remains binding.

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