Natural justice in production capacity disputes requires notice and opportunity before adverse reliance on changed technical parameters.

An adjudicatory order fixing the annual production capacity of a rolling mill under the relevant notification could not stand where it relied on changed technical parameters, including gear-box ratio and the meaning of parameter "d", without first giving the assessee an opportunity to explain the variation. The Tribunal held that this omission breached the principles of natural justice, because an adverse conclusion on declared parameters cannot be reached without fair notice and hearing. The impugned order was therefore set aside and the matter remanded for fresh adjudication de novo.

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Issues: Whether the order fixing the annual production capacity of the rolling mill, based on declared parameters under the relevant notification, was sustainable when the assessee was not given an opportunity to explain the changes in the parameters.

Analysis: The adjudicating authority relied upon changes in parameters such as the gear-box ratio and the meaning attributed to the parameter 'd' in the formula under the notification. The assessees were not put on notice or afforded an opportunity to explain the variation in the declared parameters before an adverse conclusion was reached. In these circumstances, the order was held to suffer from breach of the principles of natural justice. The Tribunal also noted that the change in the meaning of the parameters explained the apparent variation in the figures relied upon by the authority.

Conclusion: The impugned order was set aside and the matter was remanded for fresh adjudication de novo.

Final Conclusion: The appellant obtained relief by way of setting aside of the order and remand for reconsideration in accordance with law.

Ratio Decidendi: An adjudicatory order founded on changed technical parameters cannot be sustained unless the assessee is given a fair opportunity to explain the variation; failure to do so vitiates the order for breach of natural justice.

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