Natural justice in de novo adjudication requires supply of relied upon documents before finalising the demand.

Where a show cause notice refers to documents as relied upon, those materials must be supplied to the assessee so they can inspect and rebut them. In this CESTAT matter, a prior remand had specifically directed furnishing of the relied upon documents, but the record showed they were still not supplied in the de novo proceedings. The Department's assertion that the documents were not relied upon did not cure the defect. The adjudication was therefore held to be vitiated for breach of natural justice, the de novo order was set aside, the assessee's appeals were allowed, and the Revenue's appeal was rejected as infructuous.

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Issues: Whether the de novo adjudication was vitiated because the documents relied upon in the show cause notice were not supplied to the assessee, thereby violating the principles of natural justice.

Analysis: The matter had earlier been remanded with a specific direction to furnish the relied upon documents. The record showed that those documents were not supplied in the de novo proceedings, and the non-compliance was not cured by the Department's assertion that the documents were not relied upon. Once the notice itself refers to documents as relied upon, the assessee must be given a fair opportunity to inspect and rebut them. Failure to furnish such material amounts to denial of a reasonable opportunity and vitiates the adjudication.

Conclusion: The de novo order was set aside for violation of the principles of natural justice, and the assessee's appeals were allowed while the Revenue's appeal was rejected as infructuous.

Ratio Decidendi: Where relied upon documents referred to in the show cause notice are not supplied despite a specific remand direction, the adjudication is invalid for breach of natural justice and cannot be sustained.

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