2017 (5) TMI 271 - AT - Customs

Valuation - rejection of transaction value as fixed by foreign chartered engineering certificate - case of respondent is that the department has arbitrarily gone with the third Chartered Engineer value without giving any reason to the importer for rejecting the value of foreign chartered engineer or of the first two chartered engineers - principles of natural justice - Held that - no reason was given for rejecting the declared value by assessing officer and no opportunity of personal hearing was given to the assessee before enhancing the value on the basis of third Chartered Engineer certificate. Besides this, no speaking order was issued. Mere presence of the CHA at the time of examination does not mean that the copy of the third chartered engineer report was provided to the respondent and it is clear that they were not given a chance to rebut the same. Appeal of department dismissed - decided in favor of respondent.

Summary

Issues: Assessment of imported goods based on value, violation of natural justice, rejection of chartered engineer reports, misdeclaration of model number impacting value, validity of Commissioner (Appeals) order.

Analysis:
1. Assessment based on value: The appellant imported a printing machine and declared its value as 35000 USD. The department, without sufficient reason, enhanced the value to 110000 USD based on the opinion of a third Chartered Engineer. The Commissioner (Appeals) rightly ordered assessment based on transaction value, highlighting the lack of reasoning for rejecting the declared value and the absence of a personal hearing opportunity for the appellant.

2. Violation of natural justice: The department's argument that natural justice wasn't violated due to the presence of a Customs House Agent (CHA) during examination was dismissed. The tribunal noted that the appellant was not provided with the third Chartered Engineer's report for rebuttal, indicating a clear violation of natural justice principles.

3. Rejection of chartered engineer reports: The department's arbitrary rejection of reports from foreign and local Chartered Engineers without valid reasons was criticized. The tribunal emphasized that one expert's opinion cannot be disregarded based solely on another expert's view unless there are substantial independent grounds for rejection, citing legal precedents to support this stance.

4. Misdeclaration of model number: The department's claim of misdeclaration impacting the value was deemed unsubstantiated, as no show cause notice for misdeclaration or confiscation was issued. This lack of formal action indicated that the misdeclaration argument was an afterthought and not a valid basis for enhancing the value of the imported goods.

5. Validity of Commissioner (Appeals) order: The tribunal upheld the Commissioner (Appeals) order, noting its reasoned approach and fair consideration of the facts presented. The order was deemed free from any defects, and the department's appeal was consequently dismissed.

In conclusion, the tribunal's detailed analysis highlighted the importance of procedural fairness, valid reasoning for value assessment, and adherence to legal principles in customs valuation cases. The judgment emphasized the need for transparency, proper justification for decisions, and respect for the rights of appellants in customs disputes.