Natural justice and inconsistent appellate findings led to remand for fresh adjudication after hearing both sides.

An appellate order passed without notice or hearing to the assessee cannot be sustained where principles of natural justice are not observed. The text also highlights that contradictory findings in connected appeals arising from the same adjudication, especially on confiscation and penalty, create inconsistency requiring correction. Because the departmental appeal was decided by modifying the adjudication order while the assessee's connected appeal was dealt with differently on the same issues, both appellate orders were set aside and the matters remanded for fresh adjudication after affording due opportunity of hearing to both sides.

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Issues: Whether the orders-in-appeal were vitiated for having been passed without notice and hearing to the assessee, and whether the contradictory appellate findings required the matters to be remanded for fresh decision.

Analysis: The appellate authority had disposed of the departmental appeal by modifying the adjudication order, while in the assessee's connected appeal it had taken a different view on the same original order. The two appellate orders thus contained inconsistent findings on confiscation and penalty arising from the same adjudication. The assessee had not been issued notice or afforded a hearing before the departmental appeal was decided. An order passed without observing the principles of natural justice cannot be sustained, particularly when it also creates conflicting conclusions on identical issues.

Conclusion: The orders-in-appeal were set aside and both matters were remanded to the Commissioner (Appeals) for fresh adjudication after giving due opportunity of hearing to both sides.

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