Natural justice in customs adjudication requires disclosure of adverse test reports before confiscation or penalty is imposed.

Customs adjudication may be vitiated where an adverse chemical test report relied on for confiscation and penalty is not disclosed to the importer, because natural justice requires prior disclosure and a fair chance to rebut the material. A hearing process that splits the inquiry between two officers can also heighten unfairness if the material recorded at one stage is later used in adjudication without an effective opportunity to answer it. Where such non-disclosure goes to the root of the decision, the defect is not cured by the existing record, and the adjudication order is unsustainable and liable to be quashed.

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Issues: Whether the customs adjudication order was vitiated for breach of the principles of natural justice by relying on a chemical test report that was not disclosed to the importer and by adopting a hearing procedure that did not afford a fair opportunity to meet the material used against it.

Analysis: The adverse chemical test report formed part of the basis of the confiscation and penalty order, yet it was not communicated to the importer so that it could be tested or rebutted. Where the authority relies on such material, fairness requires disclosure and an opportunity to answer it before an adverse decision is taken. The procedure adopted in two stages, with one officer recording material that was later used by another officer in adjudication, also heightened the risk of unfairness. The defect went to the root of the adjudication and could not be cured by the record as it stood.

Conclusion: The adjudication order was unsustainable for breach of natural justice and was quashed.

Ratio Decidendi: An adjudicating authority that relies on undisclosed adverse material must disclose it to the affected party and afford an effective opportunity to rebut it before passing a penal order.

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