2021 (3) TMI 1190 - AT - Customs

Valuation of imported goods - Laptops - rejection of declared value - value rejected merely based on NIDB data - HELD THAT - It clearly transpires that not only is the order passed by the adjudicating authority a very cryptic order but even otherwise opportunity was not provided to the appellant to file a detailed reply. The appellant had expressed inability to file a detailed reply because the documents, on the basis of which the declared value indicated in the 14 bills of entry was rejected, was not provided. It is, therefore, a fit care case which should be recommended to the adjudicating authority for passing a fresh order. The relevant documents shall be provided to the appellant within three weeks from today. The appellant shall file a reply within three weeks thereafter and the adjudicating authority shall pass a reasoned order within three weeks thereafter - Appeal allowed by way of remand.

Issues:
Undervaluation of imported goods, imposition of penalty under Customs Act, 1962, principles of natural justice violation, rejection of declared value under Customs Valuation Rules, appeal against order-in-appeal.

Analysis:

1. Undervaluation of Imported Goods:
The appellant imported LCD Panels for laptops, and the Department suspected undervaluation in the declaration of goods. A show cause notice was issued calling for an explanation regarding the declared value in the bills of entry. The original authority confirmed the demand of duty, interest, and imposed a penalty on the appellant based on their findings.

2. Imposition of Penalty under Customs Act, 1962:
The penalty was proposed under sections 112(a), 112(b), or 114A of the Customs Act, 1962, due to the suspected undervaluation of goods. The original authority upheld the imposition of the penalty in their order-in-original dated 13/07/2015.

3. Principles of Natural Justice Violation:
The appellant contended that there was a violation of principles of natural justice as they were not provided with the necessary documents to prepare a detailed reply. Despite attending hearings and submitting an interim reply, the appellant's submissions were dismissed without detailed reasons, leading to a lack of opportunity to present a comprehensive defense.

4. Rejection of Declared Value under Customs Valuation Rules:
The appellant argued that their declared value, considered as transaction value under Section 14 of the Customs Act, 1962, was rejected solely based on NIDB data without sufficient grounds under Rule 12 of the Customs Valuation Rules. They emphasized that the declared value should have been accepted unless cogent reasons for rejection were provided.

5. Appeal Against Order-in-Appeal:
The appellant appealed to the first appellate authority, citing various grounds, including the lack of personal hearing, non-consideration of their submissions, and the rejection of declared value without proper justification. However, the first appellate authority upheld the original authority's decision, prompting the appellant to approach the Appellate Tribunal CESTAT NEW DELHI.

In the final judgment, the Appellate Tribunal set aside the impugned order, emphasizing the lack of a detailed reply opportunity for the appellant and the failure to provide necessary documents for their defense. The Tribunal directed the adjudicating authority to provide relevant documents to the appellant, allowing them to file a reply and instructed the authority to pass a reasoned order within a specified timeline. The appeal was allowed, and the matter was remanded for a fresh order in accordance with the provided directions.

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