Appellate remand power and natural justice: non-supply of unrelied documents justified fresh adjudication

The amended appellate power under Section 35A of the Central Excise Act was read as including authority to set aside an order and remand the matter for fresh adjudication, and the remand was therefore justified. Non-supply of seized but unrelied upon documents, despite repeated requests, was treated as a breach of natural justice because it impaired an effective defence, so the remand on that ground was also upheld. The appellate order of remand was sustained.

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Issues: (i) Whether the Commissioner (Appeals) retained the power to remand the matter for de novo adjudication after amendment of Section 35A of the Central Excise Act. (ii) Whether remand was justified on the ground that the unrelied upon documents seized during investigation were not supplied to the assessee.

Issue (i): Whether the Commissioner (Appeals) retained the power to remand the matter for de novo adjudication after amendment of Section 35A of the Central Excise Act.

Analysis: The amended appellate provision was construed in the light of the Supreme Court's interpretation of the corresponding customs provision. It was held that the appellate power to confirm, modify, annul, or otherwise dispose of the order appealed against necessarily includes the power to set aside the order and remand the matter for fresh adjudication.

Conclusion: The Commissioner (Appeals) did retain the power to remand the matter for de novo adjudication.

Issue (ii): Whether remand was justified on the ground that the unrelied upon documents seized during investigation were not supplied to the assessee.

Analysis: The record showed that the assessee had repeatedly sought the seized documents, that only relied upon documents were furnished, and that the departmental instructions required return or supply of unrelied upon documents. Denial of such documents was treated as a breach of natural justice because it prevented an effective defence.

Conclusion: The remand on the ground of non-supply of unrelied upon documents was justified.

Final Conclusion: The appellate order of remand was upheld and the challenge to it failed.

Ratio Decidendi: The power to annul an order and remit the matter for fresh decision is inherent in the appellate authority's statutory power, and remand is justified where denial of requested unrelied upon documents causes violation of natural justice.

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