2020 (10) TMI 179 - AT - Customs

Principles of Natural Justice - Valuation of imported goods - re-determination of value sought to be done by the Adjudicating Authority - Chinese origin goods or Vietnamese and Swiss origin goods - Rejection of declared goods - HELD THAT - It appears that the Adjudicating Authority has alleged the mis-declaration on the basis of the only fact that a small percentage of goods are not adhering to the country of origin. The appellants claim that they have contracted with the supplies and the goods came from China even though some goods had having marking of the countries. It is not forthcoming in the order as to how the importer had knowledge that some goods were of origin other than mentioned in COO. Moreover, it is not discussed as to how 80% goods whose COO was correctly declared were liable to calculation and re-determination of value. Similarly, the plea that the impugned goods are not liable to MRP was not discussed. Moreover, the Appellate Commissioner has based his order on the basis of report/comments dated 18.11.2011 obtained from Additional Commissioner. It is not clear whether copy of such report was given to the appellant and his submissions were obtained. The same are not part of findings of OIO. We also find that the OIO has some contradictions. On the one hand OIO says there are no imports of identical or similar goods, and the other hand re-determines the values of some goods on the basis of price of identical goods said to have been imported by the appellants themselves. Moreover, adjudicating authority observes that the appellant has not been able to justify the vast difference in value with any cogent reasons. It is for the department to prove that valuation was wrong rather than the appellant proving it otherwise. Under the circumstances, the issue needs to go back to the Original Authority to appreciate the facts afresh, considering the submissions of the appellant and to pass a reasoned order as per law - Appeal allowed by way of remand.

Summary

Issues:
Violation of principles of natural justice and legality of re-determination of value by the Adjudicating Authority.

Analysis:
The case involved the appellant filing a Bill of Entry for bags and backpacks declaring the Country of Origin as China, but upon examination, it was found that 80% of the goods were of Chinese origin, and the rest were of Vietnamese and Swiss origin. The Adjudicating Authority rejected the declared value under Rule 12 and imposed fines and penalties. The appellant contended that they were not given notice regarding the re-determination of value and that confiscation of the entire goods was unjustified. They argued that the goods were not subject to MRP-based assessment for CVD and there was no mis-declaration as they had a Country of Origin Certificate. The Adjudicating Authority was criticized for not providing sufficient reasons for re-determining the value and not following the correct procedure under CVR 2007. The appellant cited relevant case laws to support their arguments.

The Department's Authorized Representative reiterated the findings of the Adjudicating Authority and the Commissioner (Appeals). The Tribunal analyzed the case and found issues regarding the violation of natural justice principles and the legality of the value re-determination. It was noted that the Adjudicating Authority's decision was based on a small percentage of goods not adhering to the declared country of origin. The Tribunal questioned how the importer could have known about the origin of some goods not matching the COO declaration. They also highlighted contradictions in the Adjudicating Authority's findings and the lack of clarity on the report used by the Appellate Commissioner in making the decision. The Tribunal emphasized that the burden of proving incorrect valuation lies with the department, not the appellant. Therefore, they decided to remand the case back to the Original Authority for a fresh review, considering the appellant's submissions and passing a reasoned order in accordance with the law.

In conclusion, the appeal was allowed by way of remand with a directive to complete the adjudication within 12 weeks from the receipt of the order, to ensure a fair and lawful resolution of the issues raised in the case.