Natural justice requires supply of adverse material before denying CENVAT credit relief and proceeding to fresh adjudication.

Use of the jurisdictional Assistant Commissioner's report against the assessee without furnishing a copy violated natural justice, because the assessee was denied an effective opportunity to meet the material relied upon concerning reversal of proportionate CENVAT credit on goods cleared under Notification No. 30/2004-CE. The proceedings were therefore vitiated, and the matter was remanded for supply of the report, hearing of the assessee, and fresh adjudication.

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Issues: Whether the adjudicating authority violated the principles of natural justice by relying on the jurisdictional Assistant Commissioner's report without furnishing a copy to the assessee, and whether the matter warranted remand for fresh adjudication.

Analysis: The report of the jurisdictional Assistant Commissioner was used against the assessee to question the reversal of proportionate CENVAT credit attributable to goods cleared under Notification No. 30/2004-CE. The assessee had repeatedly sought a copy of that report to meet the case made out against it. In such circumstances, fairness required that the report be supplied before any adverse conclusion was reached, so that the assessee could present its defence and the adjudicating authority could decide the matter after considering that response.

Conclusion: The proceedings were vitiated by violation of natural justice, and the matter was remanded to the adjudicating authority to furnish the report, hear the assessee, and decide afresh.

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