2010 (4) TMI 823 - HC - Customs

Order ultra vires Section 14 of the Customs Act - standing orders which are formulated by respondent cannot fetter jurisdiction and vest power under the statute under Section 14 of the Customs Act and the Customs Valuation Rules framed thereunder standing orders and the guidelines framed therein cannot have the effect of superseding provision of Section 14 of the Customs Act and Customs Valuation Rules which have a statutory force. Assessments of the bills of entry - order being in breach of principles of natural justice considering the rival submissions without examining merits or demerits thereof and dispensing with the reasons in support of this order by consent of parties we set aside the order of assessment and remit the matter back to the assessing officer petition is allowed.

Summary

Issues:
Challenge to assessment order based on breach of natural justice and validity of standing order under Customs Act.

Analysis:
1. Factual Background: The petitioners, a private limited company, imported furniture for their stores in India. The assessment of the imported furniture was done by the Commissioner of Customs based on a standing order dated 13th August, 2008, which the petitioners contended was contrary to the Customs Act.

2. Legal Arguments: The petitioner's counsel argued that the standing order deviated from Section 14 of the Customs Act, which mandates the value of goods to be the transaction value. He cited relevant Customs Valuation Rules and Supreme Court judgments to support his contention that the standing order should be struck down.

3. Natural Justice: The petitioner's counsel also raised concerns about the assessment process lacking principles of natural justice as no hearing was provided before the assessment was made. He sought to quash the assessment and have the matter reassessed without considering the standing order.

4. Respondent's Defense: The respondent's counsel clarified that the standing order was merely guidelines to assist assessing officers in cases where the declared value of goods was doubted. He argued that the actual valuation should align with the Customs Act and Valuation Rules, emphasizing the discretionary nature of the guidelines.

5. Court's Decision: After considering both sides, the Court held that the standing order was non-binding and could not override statutory provisions. It emphasized that assessing officers must adhere to the Customs Act and Rules, using the guidelines only where necessary. The Court referenced relevant case law to support its stance.

6. Conclusion: The Court found the assessment order lacking in natural justice and set it aside, remitting the matter for fresh assessment while clarifying the limited applicability of the standing order. The petition was allowed with no costs awarded.

This detailed analysis highlights the key legal and factual aspects of the judgment, focusing on the challenges to the assessment order, the arguments presented by both parties, the Court's reasoning, and the final decision rendered by the Bombay High Court.