2016 (8) TMI 1402 - AT - Customs

Valuation - enhancement of value without any basis - principles of natural justice - Held that - The enhancement of the value from US 300 to US 450 was done by Assessing Officer arbitrarily without any basis. It is also observed that before enhancement of the declared value, it is necessary that assessing officer should have given opportunity to the assessee and also cite the proper reasons for not accepting the declared value and what is the basis of the enhancement of value and basis of quantum of enhancement. No efforts was made by the assessing officer to find out the fact in this regard. In the show cause notice also no reason was given for enhancement of the value, enhancement of the value was made directly on the Bill of Entry at the time of assessment, which is gross violation of principle of natural justice. Matter remanded to the original authority for passing a speaking order - appeal allowed by way of remand.

Summary

Issues:
Enhancement of declared value without proper basis and violation of natural justice.

Analysis:
The case involved an appeal against the enhancement of the declared value of goods imported by the appellant. The appellant had filed a Bill of Entry for clearance of goods and declared an invoice value, which was then assessed at a higher value by the Assessing Officer. The appellant contended that the enhancement was arbitrary and lacked any basis, constituting a violation of natural justice. The Commissioner (Appeals) upheld the original order, leading to the appeal before the Tribunal.

The appellant's counsel argued that the Assessing Officer had not provided any reason or evidence for the enhancement, emphasizing the importance of following the Valuation Rules. It was asserted that the enhancement was illegal and not acceptable due to the lack of procedural fairness and justification for the valuation change. On the other hand, the Revenue representative reiterated the findings of the original order.

Upon careful consideration of the submissions, the Tribunal found that the enhancement from US $300 to US $450 was indeed done arbitrarily without proper basis. It was highlighted that before enhancing the declared value, the assessing officer should have given the assessee an opportunity to respond and provide reasons for the valuation change. However, in this case, no such effort was made, and the enhancement was made directly at the time of assessment without following due process. The Tribunal concluded that there was a gross violation of natural justice in the assessment process.

Consequently, the Tribunal set aside the impugned order and remanded the matter to the original authority for a detailed and reasoned decision. The appeal was allowed on the grounds of procedural irregularities and lack of proper justification for the valuation enhancement. The judgment emphasized the importance of adhering to principles of natural justice and procedural fairness in valuation assessments.