Natural justice breach in excise adjudication led to setting aside the demand and penalties for non-supply of relied upon documents.

The demand of duty and penalties was held unsustainable because the relied upon documents were not supplied, depriving the appellants of an effective defence. The Tribunal treated the failure to provide the material, despite earlier remand directions to supply documents and grant a hearing, as a serious breach of natural justice. In the absence of the documents on which the adjudication was based, the impugned order could not be properly sustained and was set aside; the appeals were allowed.

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Issues: Whether the demand of duty and penalties could be sustained when the relied upon documents were not supplied to the appellants, resulting in violation of the principles of natural justice.

Analysis: The proceedings were found to be vitiated because the Revenue was unable to provide the relied upon documents, and the appellants had repeatedly sought them for effective defence. The Tribunal treated this as a serious breach of natural justice, especially since the earlier remand had directed supply of documents and opportunity of hearing. In the absence of the material on which the adjudication was founded, the impugned order could not be properly sustained.

Conclusion: The impugned order was set aside and the appeals were allowed in favour of the appellants.

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