2016 (8) TMI 179 - AT - Customs

Valuation - loading of 45% to the invoice value - related parties - Held that - Commissioner (Appeals) did not examine that whether loading of 45% on the invoice value is Justified, abruptly concluded that further loading is desirable. - When the order of learned Commissioner (Appeals) is of the above nature, and that demonstrates that there is violation of natural justice and appellant was not put to notice, such an order shall not stand to meet the judicial scrutiny - Matter remanded back.

Summary

Issues:
1. Enhancement of imported goods value by the appellate authority without proper reasoning.
2. Allegation of violation of natural justice by the appellant due to lack of notice for hearing.
3. Disagreement between the appellant and the learned AR regarding the loading done on the goods' invoice value.
4. Examination of the order of the learned Commissioner (Appeals) for compliance with natural justice principles.

Issue 1: Enhancement of imported goods value
The appellant contested that the learned Commissioner (Appeals) increased the imported value of goods without adequate justification, raising it to 81.82% from the initial 45% directed by the adjudicating authority. The appellant argued that the enhancement was done without any reason or notice, causing prejudice. The Tribunal found this action to be arbitrary and lacking proper explanation, thus setting aside the order and directing a re-examination of the loading percentage.

Issue 2: Allegation of violation of natural justice
The appellant claimed a violation of natural justice as the appellant was not given a fair hearing opportunity as required by section 128A of the Customs Act, 1962. The appellant contended that had a proper notice been issued, they could have provided explanations for the loading percentage. The Tribunal agreed with the appellant, emphasizing the importance of adhering to natural justice principles and ordered the matter to be remanded for a fresh adjudication with due process.

Issue 3: Disagreement on loading percentage
The learned AR argued that the appellant was heard, and the loading was appropriate. However, the Tribunal observed that the Commissioner (Appeals) had not adequately justified the increase to 81.82% from the initial 45%. The Tribunal emphasized the need for proper reasoning and fair opportunity for the appellant to present their case, leading to the decision to set aside the order for reassessment.

Issue 4: Compliance with natural justice principles
The Tribunal concluded that the order of the learned Commissioner (Appeals) displayed a violation of natural justice by not providing a fair hearing opportunity to the appellant. As a fundamental principle, natural justice must be upheld in legal proceedings. Therefore, the Tribunal set aside the order and directed a re-examination to ensure compliance with the law and the principles of natural justice.

This detailed analysis of the judgment highlights the key issues raised by the parties and the Tribunal's decision to set aside the order and remand the matter for a fresh adjudication in accordance with the principles of natural justice.