Natural justice in drawback recovery: unserved notice led to quashing of the order and remand for fresh hearing.

Recovery of drawback could not be sustained where the show cause notice remained unserved on the company and the adjudication proceeded without an effective opportunity to reply. The Court held that this violated natural justice, especially since the petitioner said it held records on inward remittance and export transactions that required consideration. The impugned order and the consequential recovery proceedings were quashed, and the matter was remitted for fresh adjudication after giving the petitioner a hearing.

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Issues: Whether the order confirming recovery of drawback and the consequential recovery proceedings were liable to be quashed for want of service of the show cause notice and violation of principles of natural justice.

Analysis: The show cause notice on which the impugned order rested had remained unserved on the company, and the order itself recorded that the notice was returned unserved. In these circumstances, the adjudication was made without affording an effective opportunity of reply. The Court also noted that the petitioner claimed to possess records regarding inward remittance and export transactions, which warranted consideration after a fair opportunity of hearing. The proper course was therefore to set aside the existing order and remit the matter for fresh adjudication after hearing the petitioner.

Conclusion: The impugned order and the consequential recovery proceedings were quashed, and the matter was remitted for fresh decision after granting an opportunity of hearing to the petitioner.

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