2014 (1) TMI 1527 - HC - Customs

Import of fitness equipment - Under valuation of products - appeal against the order of Customs and Central Excise Settlement Commission - Held that - Commission did not consider the submissions of the parties at all while dealing with the import from the US, in calculating the freight and insurance component. Para 19 of the impugned order shows that the Commission accepted the petitioner s argument on this score. However, what are the reasons that impelled the Commission to reject the petitioner s submissions in para 22 are not known. This opinion betrays an ex-facie error. This does not amount to the petitioner ventilating the grievance by which it is seeking to dissect the findings of fact choosing to retain what is in its favour and rejecting what is not. Simply put, the Commission s order is silent on the aspect with what the petitioner is aggrieved. Consignments which are in respect of identical goods though from different sources, while there could arguably be justifiable reasons to take a differential approach, in the absence of any spelt-out or considered reasons discernable to the Court or reader, such differential treatment would amount to discrimination plainly clothing this Court with jurisdiction on this score - matter is accordingly remitted to the Commission limited on this aspect. The Commission shall indicate its position after giving notice to the parties and granting such hearing as is warranted in law - Decided in favour of assessee.

Summary

Issues:
1. Import of fitness equipment from different countries.
2. Allegations of under-invoicing.
3. Approach of Customs and Central Excise Settlement Commission.
4. Treatment of freight and insurance costs.
5. Differential approach for imports from the US.
6. Rejection of petitioner's submissions by the Commission.
7. Legal interference with the Commission's order.
8. Remittance of the matter to the Commission for reconsideration.

Analysis:
The petitioner imported fitness equipment from China, Korea, and the US, facing Show Cause Notices for under-invoicing. The Customs and Central Excise Settlement Commission considered the matter, directing that actual freight and insurance costs should be used, reducing the duty leviable. However, the treatment of imports from the US was not adequately addressed by the Commission, leading to the petitioner's dissatisfaction.

The Commission's final order calculated freight and insurance on an actual basis for China and Korea but accepted the proposed values for US imports, prompting the petitioner to challenge the decision. The respondents argued against interference, citing Supreme Court precedents, emphasizing that the Commission's order should not be dissected.

The High Court observed that the Commission failed to consider the petitioner's submissions regarding US imports thoroughly. While the Commission accepted the petitioner's argument on one aspect, it rejected others without providing reasons, indicating an error. The Court noted the lack of justification for differential treatment of identical goods from various sources, potentially constituting discrimination. Consequently, the Court decided to remit the matter to the Commission for reconsideration specifically concerning imports from M/s. Cybex International Inc. regarding freight and insurance costs.

In conclusion, the High Court allowed the writ petition and pending applications, directing the Commission to review the issue of freight and insurance for US imports, ensuring parties are heard and a reasoned decision is made, highlighting the need for fair treatment and non-discrimination in such matters.