Job Work Basis and Natural Justice: Duty demand on sodium hypochloride set aside, with remand for fresh adjudication.

Duty demand on sodium hypochloride cleared to a sister unit was set aside because the appellant's plea that the goods were manufactured on job work basis under Notification No. 214/86 had not been properly considered. The tribunal found that debit of duty at detection and recorded statements were not, by themselves, sufficient to establish clandestine removal. As the relevant job work records had been seized and the appellant was not given an effective opportunity to rely on those records or the sister unit's parallel records, the matter was remanded for de novo adjudication with observance of natural justice.

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Issues: Whether the duty demand on sodium hypochloride, cleared to the sister unit, was sustainable without considering the appellant's plea that the goods were manufactured on job work basis under Notification No. 214/86.

Analysis: The appellant contended that the goods were manufactured on job work basis and cleared under challans to the sister unit, but the relevant job work records had been seized by the department. The mere debit of duty at the time of detection and the recorded statements were held insufficient by themselves to conclude clandestine removal. Since the appellant was not given an effective opportunity to substantiate the plea through the seized records or the sister unit's parallel records, the matter required reconsideration with observance of natural justice.

Conclusion: The duty demand relating to sodium hypochloride was set aside and the matter was remanded for de novo adjudication in favour of the appellant.

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