2018 (6) TMI 821 - AT - Customs

Principles of Natural Justice - non-grant of personal hearing - case of appellant is that the impugned order has been passed without giving them a copy of the test report of the samples drawn from the imported goods and without granting them cross examination - Held that - A perusal of the show cause notice shows that no reliance has been placed on the test report. While it is mentioned that samples were drawn, but there is no mention of any testing done and test report obtained - The case of the appellant is that the test report has not been supplied to them. However, when test report not a relied upon document if supplied or not supplied becomes immaterial. Revenue has not relied on the test report for establishing its case. Also, sufficient evidence has been produced by Revenue to establish that the goods were indeed misdeclared by the appellant with intention to evade customs duty. The appellant is liable to pay duty, interest and also liable for imposition of penalty - appeal dismissed - decided against appellant.

Summary

Issues:
- Failure to grant personal hearing and observe principles of natural justice
- Allegation of undervaluation of imported goods
- Discrepancy in description and value of goods
- Non-compliance with Tribunal's directions in remand proceedings
- Reliance on retracted statements
- Discrepancy in goods ordered and received
- Allegation of misdeclaration to evade customs duty

Analysis:

Issue 1: Failure to grant personal hearing and observe principles of natural justice
The appellant argued that the impugned order was passed without granting a copy of the test report and cross-examination. They claimed to have repeatedly requested these documents and cross-examination but were denied. The Tribunal had earlier remanded the case for a personal hearing, which was not fully complied with in subsequent proceedings.

Issue 2: Allegation of undervaluation of imported goods
The case revolved around the appellant's declaration of secondary/defective CRCA sheets at a lower value compared to the actual value of secondary/defective CRGO electrical sheets imported. The appellant's partner admitted to manipulating the value to undervalue the goods, leading to discrepancies in the declared price and actual value.

Issue 3: Discrepancy in description and value of goods
The documents and correspondence recovered indicated a discrepancy in the description and value of the imported goods. The appellant had allegedly requested the foreign supplier to misdescribe the goods to evade customs duty. Statements and evidence pointed towards intentional misdeclaration for financial gain.

Issue 4: Non-compliance with Tribunal's directions in remand proceedings
Despite the Tribunal's directions to provide necessary documents and conduct tests, the appellant claimed that the test reports were not provided, and cross-examination was not allowed. This non-compliance raised concerns regarding the fairness of the proceedings.

Issue 5: Reliance on retracted statements
The appellant attempted to discredit statements made by their partner by claiming they were retracted immediately. However, the retraction was later retracted, and the credibility of the statements was upheld by the Revenue. The Tribunal found the retraction to be an afterthought and not a valid defense.

Issue 6: Discrepancy in goods ordered and received
The appellant argued that the goods received were not as per the original order placed with the supplier. However, the evidence presented did not support this claim, and discrepancies in the goods ordered and received were not proven to be due to supplier error as alleged.

Issue 7: Allegation of misdeclaration to evade customs duty
Based on the evidence provided, including statements, recovered documents, and correspondence, the Revenue established that the appellant intentionally misdeclared the goods to evade customs duty. The Tribunal found sufficient evidence to hold the appellant liable for duty, interest, and penalties, ultimately dismissing the appeal.