Pre-decisional hearing and natural justice in excise adjudication can raise substantial questions of law despite a later appeal.

A denial of an effective pre-decisional hearing in central excise adjudication, particularly where civil consequences follow, may breach natural justice and raise a substantial question of law. The court noted that the fairness of hearing depends on the facts of each case and that a post-decisional appeal does not necessarily cure the absence of prior opportunity. It treated issues relating to compliance with the hearing requirement, confiscation under the excise rules, and alleged prejudgment by the adjudicating authority as arguable legal questions and directed that the identified questions be referred for decision.

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Issues: Whether questions 1, 2, 5 and 7 raised by the petitioner constituted substantial questions of law arising out of the Tribunal's order and required reference.

Analysis: The petition challenged an ex parte adjudication in central excise proceedings where the assessee contended that the opportunity to reply was ineffective because of circumstances attributable to counsel and because the requested documents were not supplied. The Court treated the complaint as one of denial of fair hearing and noted that natural justice depends on the facts of each case. It accepted that civil consequences followed from the adjudication and that a post-decisional appeal does not necessarily cure the absence of a pre-decisional hearing. The Court also considered that the questions concerning compliance with the hearing requirement, confiscation under the excise rules, and the allegation of prejudgment by the adjudicating authority were not merely factual but raised arguable legal issues.

Conclusion: Questions 1, 2, 5 and 7 were held to be substantial questions of law and were directed to be referred for decision.

Final Conclusion: The reference application succeeded to the extent that the Tribunal was required to state the case on the identified questions, leaving the assessee entitled to have those legal issues adjudicated by the High Court.

Ratio Decidendi: A denial of effective pre-decisional hearing in adjudicatory proceedings, especially where civil consequences follow, may amount to a breach of natural justice and can give rise to a substantial question of law notwithstanding a subsequent appeal.

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