Natural justice requires access to relied upon documents and hearing before rebate recovery can be sustained.

Adjudication based on relied upon documents must afford the noticee access to those materials and a meaningful opportunity of hearing; otherwise the proceedings are vitiated for breach of natural justice. Here, the orders confirming recovery of alleged excess rebate were unsustainable because the assessee was denied the relied upon documents and personal hearing even after an appellate direction to provide them before fresh adjudication. The later de novo and revisional orders did not cure that defect. The orders were set aside, with a direction to furnish the documents, permit inspection and copies if required, and then proceed afresh in accordance with law.

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Issues: Whether the orders confirming recovery of excess rebate were liable to be set aside for non-supply of relied upon documents and denial of opportunity of hearing, in breach of natural justice.

Analysis: The demand arose out of alleged excess rebate claimed on exported goods, and the appellate authority had earlier set aside the original order on the ground that the assessee was entitled to peruse the relied upon documents and to be heard before fresh adjudication. The subsequent de novo order again proceeded to deny access to the relied upon documents and personal hearing on the premise that the documents related to the job worker and that the job worker had accepted the allegations. That approach was held to be inconsistent with the earlier appellate direction and with the requirement that a noticee must be given a fair opportunity to meet the materials relied upon against it. The revisional order also did not cure this defect.

Conclusion: The impugned orders were unsustainable for violation of principles of natural justice and were set aside, with a direction to furnish the relied upon documents, permit inspection and copies if required, and then proceed afresh in accordance with law.

Ratio Decidendi: Where adjudication is founded on relied upon documents, denial of access to those documents and of a meaningful hearing vitiates the proceedings for breach of natural justice.

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