2016 (12) TMI 576 - AT - Customs

Valuation - misdeclaration - mavish - black raisins - description of the goods - Held that - So far as the description of the goods is concerned, the character of the goods was raisin only when the laboratory could not opine properly. Also, we find that there was a leading question put to the laboratory to opine in favour of Revenue. Department should have only asked the laboratory to state the nature and character of the goods and done classification according to law. Whereas the department framed the question to the laboratory stating that whether the goods under import are Black Bhokri or not. The opinion of the laboratory when remained doubtful, that is not acceptable to law. So far as the valuation issue is concerned, there is no material shown to us to disturb the transaction value declared by the appellant. It is rule of law that to reject the transaction value, the department should state the reason why the transaction value declared is not correct. In the present case, the imports being of 2002, Customs Valuation Rules, 1998 applies. To proceed with a best judgement assessment, Rule 10A requires record of reasoning in case the transaction value declared by importer is disbelieved. There is no such reason recorded since nothing was brought to our notice while provisional release was allowed. There is nothing on record to suggest that the contemporaneous value adopted by the department had the basis to compare the goods of the appellant in a rational manner. When the requirement of law is examined, it appears that to doubt the truth or accuracy of the value declared, the officer concerned has to intimate the importer in writing the grounds of his doubt. There was no such intimation of doubt in writing issued by the authority to the importer. Before proceeding further, against the importer, the officer shall follow the course of natural justice as has been embedded into Rule 10A. That was not followed. The intimation intended by law is to provide an opportunity to the importer of being heard on the controversy. Revenue explains that issuance of SCN is sufficient compliance of Rule 10A. We do not understand how a citizen can be dealt to the detriment of Justice without following the procedure known to law. Codified procedure of law is enacted to serve public interest and an order to be passed publicly by a public authority. That was a failure by the department not acting in accordance with law - appeals allowed.

Summary

Issues:
1. Declaration of goods as "Black Mavish" and valuation of goods.
2. Allegations of misdeclaration of value and description by the department.
3. Compliance with Customs Valuation Rules, 1998 and Rule 10A.

Issue 1: Declaration of Goods and Valuation:
The appellants imported goods described as "Black Mavish" and "raisins," facing a dispute regarding the nature of the imported items. The department questioned the valuation of the goods without providing substantial evidence to disturb the transaction value declared by the appellants. The appellants argued that the department's actions lacked a basis for arbitrary valuation adjustments, emphasizing the need for redetermination in line with Valuation Rules.

Issue 2: Allegations of Misdeclaration:
The Revenue contended that misdeclaration occurred in two cases where goods were labeled as "raisins" instead of "Black Mavish," supported by the testing laboratory's opinion favoring the Revenue. However, the tribunal noted that the department's approach in seeking the laboratory's opinion was leading and lacked proper classification according to law. The tribunal highlighted the necessity for a fair and unbiased assessment of the goods' nature and character.

Issue 3: Compliance with Customs Valuation Rules and Rule 10A:
The tribunal scrutinized the adherence to Customs Valuation Rules, 1998, particularly Rule 10A, requiring a valid reason supported by evidence to doubt the declared value. It was observed that the department failed to follow the prescribed procedure of intimating the importer in writing about doubts regarding the declared value, thus violating the principles of natural justice. The tribunal emphasized the importance of procedural fairness and public interest in legal proceedings, underscoring the necessity for authorities to act in accordance with established laws.

In conclusion, the tribunal allowed all four appeals, citing the department's failure to comply with legal procedures and provide substantial grounds for disputing the declared value of the imported goods. The judgment underscored the significance of procedural fairness, adherence to Customs Valuation Rules, and the requirement for authorities to follow due process in dealings with citizens.