Natural justice requires consideration of appeal grounds on merits; refusal to hear the defence led to remand.

Refusal to examine appeal grounds as "fresh" was contrary to natural justice where the appellant had not been given proper consideration of its defence on a shortage dispute involving duty-free imported polyester film yarn used in export production. The appellate authority's refusal to consider the merits merely because no reply had been filed before the adjudicating authority was unsustainable. The impugned order was set aside and the matter remanded to the original adjudicating authority for reconsideration, with liberty to the appellant to file its defence and be heard.

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Issues: Whether the appellate authority was justified in refusing to consider the grounds raised in appeal as fresh grounds and whether the matter required remand for reconsideration in light of natural justice.

Analysis: The demand arose from shortage of duty-free imported polyester film yarn intended for use in manufacture of export goods. The appellate authority declined to examine the grounds in appeal on the premise that no reply had been filed before the adjudicating authority and the issues were fresh grounds. Such refusal to consider the defence on merits was held to be contrary to the principle of natural justice. As the appellant had not been afforded proper consideration of its defence, the impugned order could not be sustained.

Conclusion: The impugned order was set aside and the matter was remanded to the original adjudicating authority for reconsideration, with liberty to the appellant to file its defence and appear for hearing.

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