Natural justice in production capacity revision requires notice and hearing before duty liability is reworked.

Revision of a textile processor's annual production capacity by including gallery length, with corresponding increase in monthly duty liability, was challenged as having been made without prior notice or opportunity of hearing. The Tribunal accepted that the assessee must be heard before the capacity computation is altered on identical facts already considered earlier. The impugned order was therefore set aside and the matter remanded for fresh adjudication after issue of a show cause notice and grant of hearing.

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Issues: Whether the order determining the annual production capacity and revised duty liability was liable to be set aside for want of notice and opportunity of hearing to the assessee.

Analysis: The capacity of the textile processor had been revised by adding gallery length for the purpose of determining production capacity under Trade Notice No. 22/99, with consequential revision of the monthly duty liability. The assessee challenged the revision on the ground that it was made without prior notice and without affording an opportunity to contest the addition of galleries. Following the earlier Tribunal view on identical facts, the matter required fresh adjudication after notice and hearing.

Conclusion: The assessee's contention was accepted and the impugned order was set aside with a direction to re-adjudicate the matter after issuing a show cause notice and granting an opportunity of hearing.

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