Natural justice breach in customs settlement led to setting aside the order and remand for fresh consideration.

A settlement order confirming customs duty was vitiated because it relied on a communication that had not been effectively furnished to the petitioner. Reliance on undisclosed material breached the principles of natural justice, so the High Court set aside the impugned order and remanded the matter to the Settlement Commission for fresh consideration in accordance with law, with liberty to refer the matter back to the adjudicating authority if required under the statutory scheme.

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Issues: Whether the settlement order confirming customs duty could be sustained when a communication relied upon in the adjudication had not been furnished to the petitioner and whether the matter required remand for fresh decision.

Analysis: The order was founded, in part, on a communication said to have been sent to the petitioner, but the subsequent record showed that the communication had remained undelivered and was taken into account without effective disclosure to the petitioner. Since material not supplied to a party was relied upon in deciding the settlement application, the decision was vitiated by breach of the principles of natural justice. In the agreed circumstances, the proper course was to set aside the impugned order and return the matter to the Settlement Commission for reconsideration in accordance with law, with liberty to consider reference back to the adjudicating authority if required under the statutory scheme.

Conclusion: The impugned settlement order was set aside and the matter was remanded to the Settlement Commission for fresh adjudication, in favour of the petitioner.

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