Natural justice bars levy based on undisclosed departmental material used to classify imported goods.

A levy based on departmental manufacturer specifications and literature cannot be sustained where that material was not disclosed to the importer before adjudication. The assessment here rested on undisclosed evidence used to determine molecular weight and coverage under the safeguard notification, depriving the importer of an effective opportunity to rebut the material. That procedure was held contrary to fair process and the principles of natural justice, so the demand was not upheld and the order setting it aside was sustained.

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Issues: Whether the demand of safeguard duty could be sustained when the departmental manufacturer's specification and literature relied upon to classify the imported goods were not supplied to the importer.

Analysis: The assessment was made on the basis of manufacturer's specification and literature said to have been obtained by the Department, and the finding on molecular weight and coverage under the safeguard notification rested on that material. Since the material was not furnished to the importer before deciding the matter, the importer was denied an effective opportunity to meet the evidence relied upon against it. In such circumstances, the adjudication was contrary to fair procedure and offended the principles of natural justice.

Conclusion: The challenge to the levy could not succeed, and the order setting aside the demand was sustained in favour of the assessee.

Ratio Decidendi: An assessment based on departmental material not disclosed to the importer cannot be sustained where the undisclosed material is relied upon to justify levy.

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