Natural justice and excise retest rights: no choice of laboratory, but denial of requested hearing vitiates adjudication.

A manufacturer may seek retest under the Central Excise Rules, but cannot insist on a laboratory of its choice; a retest by the Chief Chemist was a valid retest and could not be discarded merely because the assessee distrusted it. However, failure to afford the assessee the requested personal hearing after the retest report amounted to breach of natural justice and vitiated the adjudication. The remand was therefore sustained, with adjudication to proceed on the basis of the existing two test reports after giving the assessee an opportunity of hearing.

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Issues: Whether the Assistant Collector's order was vitiated for breach of the principles of natural justice, and whether the assessee had any right to insist that the sample be retested in a laboratory other than the one that conducted the original test.

Analysis: The record showed that the assessee had specifically sought an opportunity of personal hearing after the retest report, but no hearing was recorded before adjudication. That failure amounted to breach of natural justice. At the same time, Rule 56(4) of the Central Excise Rules conferred only a right to seek retest and did not confer a right to choose a different laboratory. The second test by the Chief Chemist was a valid retest, and the mere expression of distrust in that report could not justify discarding it. The appellate authority was therefore correct in setting aside the adjudication, though not for the precise reason given by it.

Conclusion: The finding of breach of natural justice was upheld, but the assessee had no right to demand retest in a laboratory of its choice.

Final Conclusion: The remand to the Assistant Collector was sustained, with the direction that adjudication proceed on the basis of the existing two test reports after giving the assessee an opportunity of hearing.

Ratio Decidendi: A manufacturer is entitled to seek retest under the excise rules, but not to insist on a particular laboratory, and an adjudication made without affording a requested hearing is vitiated by breach of natural justice.

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