2018 (6) TMI 937 - AT - Customs

Misdeclaration of imported goods - secondary, defective/serviceable bars and rods of mild steel falling under CTH 7228.60 - principles of Natural Justice denied - neither the examination report was provided to the appellant nor the Bills of Entry which were used for the contemporaneous value was provided - Held that - The appellants have declared the goods in accordance with the pre-shipment report and the description appearing in the supplier s invoice, the charge of mis-declaration was made only after 100% examination of the goods. However, the vital documents i.e. examination report was not provided to the appellants as submitted by them. Moreover, the Bills of Entry, if any, relied upon for the purpose of enhancement of the value were also not provided to the appellant. There is a gross violation of principles of natural justice on the part of the adjudicating authority - matter remanded to the Commissioner for passing a fresh order after providing all the documents such as examination report, Bills of Entry, if any, of contemporaneous import - appeal allowed by way of remand.

Summary

Issues: Mis-declaration of imported goods, violation of principles of natural justice in adjudication process

Mis-declaration of imported goods:
The appellants imported three consignments of goods declared as "Rolling Scrap of Metal" under different Customs Tariff Headings. The goods were examined by the Special Intelligence and Investigation Branch, revealing that they were actually secondary, defective/serviceable bars and rods of mild steel falling under a different classification. The department alleged mis-declaration by the appellants, stating that the goods were undervalued compared to their actual value. Consequently, the adjudicating authority rejected the declared value and assessed it at a higher rate, confiscating the goods and imposing fines and penalties. The appellants contested the order, arguing that they were not provided with the examination report or the Bills of Entry used for valuation, leading to an ex-parte decision without following natural justice principles.

Violation of principles of natural justice in adjudication process:
In the absence of representation from the appellants, the Assistant Commissioner for Revenue reiterated the findings in the impugned order. However, upon careful consideration, the Tribunal found that the appellants had declared the goods based on pre-shipment reports and supplier's invoices, and the mis-declaration charge arose only after a full examination. Despite this, crucial documents such as the examination report and relevant Bills of Entry were not provided to the appellants, constituting a serious breach of natural justice principles. As a result, the Tribunal set aside the original order, remanding the case to the Commissioner for a fresh decision after ensuring the appellants are given access to all necessary documents and a fair opportunity for a personal hearing. The appeal was allowed by way of remand to rectify the procedural deficiencies and uphold the principles of natural justice.

This judgment highlights the importance of procedural fairness in customs adjudication processes, emphasizing the need for transparency, access to relevant documents, and the right to a fair hearing for all parties involved.