Natural justice in duty demands requires full access to seized data and relied-upon records before adverse adjudication.

Duty demand based on seized computer data and other relied-upon records cannot be sustained where the assessee is denied access to the material needed for rebuttal. The Tribunal noted that the department relied on floppy-disc extracts and seized documents, while the appellants had filed statutory excise records, yet the adjudicating authority had not fairly correlated the documents with the demand period or supplied all relevant copies and investigation results. That denial of access prejudiced the defence and violated natural justice. The impugned order was therefore set aside and the matter remanded for de novo adjudication with full opportunity of hearing and disclosure of the relevant material.

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Issues: Whether the demand and penalty could be sustained when the appellants were not furnished with all relied-upon floppy data, relevant documents, and the investigation material, and whether the matter required remand for fresh adjudication.

Analysis: The demand was founded on computerised records seized by the department and on the allegation that new cassettes were removed as re-inked goods. The appellants had filed D-3 intimations, RT-12 returns and other records, while the department relied on data extracted from 108 floppy discs and other seized documents. The Tribunal found that the adjudicating authority had not fairly correlated the documents with the demand period, had not supplied the appellants with all the relevant floppy copies or the investigation results, and had not adequately addressed the defence based on the statutory records maintained under the excise regime. In these circumstances, the appellants were held to have been prejudiced in effectively meeting the allegations.

Conclusion: The impugned order was set aside and the matter was remanded for de novo adjudication after granting the appellants full opportunity of hearing and access to the relevant material.

Ratio Decidendi: Where a duty demand is based on seized computer data and other relied-upon material, denial of access to the material necessary for rebuttal violates natural justice and justifies remand for fresh decision.

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