2019 (12) TMI 17 - AT - Customs

Valuation of imported goods - related party transactions - rejection of declared value - Rule 5 to Rule 7(a) of Custom Valuation Rules, 1988 - all points were not considered - principles of natural justice - HELD THAT - It is clear that none of the submissions made by the appellant were considered by the adjudicating authority for the reason that these submissions were not before him when the matter was adjudicated by him. Also from the observations made by the Commissioner (Appeal) in his order, and reproduced in para 1.2, supra it is clear that Commissioner (Appeal) too have not considered the defence submission - Thus it is clear that orders have been passed without considering the defence submissions and hence is in violation of principle of natural justice, which clearly state audi alteram partem i.e. nobody should be condemned unheard . The matter needs to be remanded back to the concerned adjudicating authority for reconsideration - Appeal allowed by way of remand.

Summary

Issues involved:
1. Customs valuation of imported goods
2. Relationship between importer and supplier
3. Compliance with procedural requirements

Analysis:

1. Customs Valuation of Imported Goods:
The appeal was against an order upholding the assessment of imported goods by adding 30% to the declared import invoice value. The Commissioner Customs (Appeals) directed the assessing groups to evaluate goods under Customs Valuation Rules, 1988, if contemporaneous imports at a higher price were noticed. The order also allowed for additions under Rule 9(2) and loading of Royalty/Technical Know-How fees under Rule 9(1)(c). The decision was subject to review every three years, with a provision for provisional assessment if the method of invoicing changed.

2. Relationship Between Importer and Supplier:
The appellant and overseas supplier had a joint venture on a 50:50 basis, raising doubts about the influence of their relationship on the declared invoice value of imported goods. The Commissioner (Appeal) noted the lack of evidence to counter the findings of the original authority, leading to the affirmation of the adjudication order. The importer's failure to submit documents and respond to communications was a key factor in the decision-making process.

3. Compliance with Procedural Requirements:
The adjudicating authority's decision was challenged on the grounds of not considering the appellant's submissions and defense adequately. The tribunal found that the orders were passed without due consideration of the defense submissions, violating the principle of natural justice. Consequently, the matter was remanded back to the adjudicating authority for fresh consideration, emphasizing the importance of allowing the party to present all defense submissions for a fair decision-making process. The appellants were instructed to cooperate fully with the adjudicating authority during the remand proceedings to ensure a timely resolution within six months.