Natural justice in excise demands: failure to supply a relied-upon test report vitiated the demand and allowed relief.

Non-supply of a relied-upon chemical test report to the assessee, where that report formed the basis of the demand, was treated as a breach of natural justice because it deprived the assessee of a timely opportunity to seek retesting under the relevant excise procedure. The demand was therefore held unsustainable, the impugned order was set aside, and consequential relief followed.

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Issues: Whether failure to furnish the chemical test report to the assessee, thereby preventing a timely request for retest, violated the principles of natural justice and vitiated the demand.

Analysis: The demand was founded on the test report showing that the cartons were made of grey board and not mill board, but the report was not supplied to the assessee shortly after receipt by the department. The assessee was therefore unable to seek retesting within the period contemplated by Rule 56(4) of the Central Excise Rules. Non-disclosure of a relied upon test report was treated as denial of a fair opportunity to meet the case and as a breach of natural justice.

Conclusion: The failure to furnish the test report was violative of the principles of natural justice and the demand could not be sustained.

Final Conclusion: The impugned order was set aside and the appeal was allowed with consequential relief.

Ratio Decidendi: Where the department relies on a chemical test report, timely non-supply of that report so as to deprive the assessee of the chance to seek retest constitutes violation of natural justice.

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