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Issues Involved:
1. Whether the assessment should have been made under Section 30(b) or Section 31 of the Sea Customs Act. 2. Whether the Customs Collector, Visakhapatnam, failed to provide a hearing and disclose the material on which the assessment was based. 3. Whether the Central Board of Revenue relied on undisclosed materials and records not available to the petitioners. 4. Whether the Central Government failed to provide a hearing before dismissing the revision petition. 5. Whether proceedings under the Sea Customs Act are quasi-judicial and require adherence to natural justice principles. Issue-Wise Detailed Analysis: 1. Assessment under Section 30(b) or Section 31: The petitioners argued that the assessment should have been made under Section 31 rather than Section 30(b) of the Sea Customs Act. Section 31 stipulates that goods chargeable with duty upon their value should be examined by a customs officer, and if the declared value is correct, the goods should be assessed accordingly. The court noted that samples from the consignments were drawn and analyzed, yet no reason was given for not accepting this evidence. The court found that the assessments were not made in accordance with the law, suggesting that the procedure under Section 31 should have been followed. 2. Lack of Hearing and Disclosure by Customs Collector: The petitioners contended that the Customs Collector, Visakhapatnam, did not provide a hearing or disclose the material on which the assessment was based. The court observed that the order from the Customs Collector was not a speaking order, as it did not provide reasons or the basis for the valuation. The court emphasized that the absence of reasons vitiated the order, as it deprived the petitioners of the opportunity to challenge the assessment effectively. 3. Central Board of Revenue's Reliance on Undisclosed Materials: The petitioners argued that the Central Board of Revenue relied on the Collector's report and records not available to them, which they could not explain or rebut. The court noted that the Central Board of Revenue's order was also not a speaking order and did not disclose the material or reasons for dismissing the appeal. This lack of transparency and failure to provide reasons rendered the order bad in law. 4. Central Government's Failure to Provide a Hearing: The petitioners claimed that the Central Government did not provide a hearing before dismissing the revision petition. The court found that the final order of the Government of India dismissing the revision petition did not provide any reasons and merely stated that it saw no reason to interfere with the Central Board of Revenue's order. The court held that the absence of a hearing and reasons violated the principles of natural justice. 5. Quasi-Judicial Nature of Proceedings: The court considered whether proceedings under the Sea Customs Act are quasi-judicial and require adherence to natural justice principles. The court referred to previous judgments, including those by Bishan Narain J. and the Calcutta High Court, which held that proceedings under the Sea Customs Act are quasi-judicial. The court concluded that such proceedings require the authorities to give reasons for their decisions and to follow the elementary rules of natural justice, including providing a hearing and disclosing the material on which decisions are based. Conclusion: The court found that the orders of the Customs Collector, Visakhapatnam, and the Central Board of Revenue did not comply with the requirements of natural justice. The assessments were not made in accordance with the law, and the orders were not speaking orders. The court directed that reassessment should be made in light of the observations made in the judgment and allowed the petitioners to file appeals against the reassessment. The petitioners were awarded costs of Rs. 500/-. Final Order: Petition allowed. The reassessment should be conducted in accordance with the principles of natural justice, and the petitioners are entitled to file appeals against the reassessment. Costs awarded to the petitioners.
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