Natural justice requires supply of seized documents used in adjudication before fresh decision on defence and liability.

Withholding copies of seized documents proposed to be relied on in adjudication breaches natural justice where those documents are necessary for an effective defence. The Tribunal held that an assessee cannot be prejudiced by being denied material in the Department's possession when the defence depends on that material, and it did not express any view on the merits of the duty demand or penalties. The adjudication orders were therefore set aside and the matter was remanded to the adjudicating authority for supply of the documents and fresh decision after giving an effective opportunity of defence.

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Issues: Whether denial of copies of relevant seized documents used in adjudication violated natural justice and warranted remand for readjudication.

Analysis: The Appellate Tribunal held that the documents proposed to be used against the appellant were required to be supplied so that an effective defence could be raised. It found that natural justice is not an inflexible formula, but where the defence depends upon documents in the Department's possession, withholding copies would prejudice the assessee's right of defence. Without expressing any view on the merits of the duty demand or penalties, the Tribunal considered it appropriate to restore the matter to the adjudicating authority for supply of documents and fresh adjudication.

Conclusion: The denial of relevant documents justified remand, and the adjudication orders were set aside for fresh decision after giving the appellants an effective opportunity to defend.

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