2023 (7) TMI 1190 - AT - Customs

Valuation - Principles of natural justice - non-speaking order - Can appellant ask for a speaking order with cogent reasons for enhancement of the value in spite of the fact that the enhanced value is accepted only for avoiding the demurrage and other charges? - HELD THAT - In view of Section 14 (valuation of goods) read with Rule 12 (2) of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007, the Proper officer has to provide cogent reasons for rejecting the declared value and the appellant has to be given an opportunity to be heard before enhancement of the declared value. Moreover, in the present case, the appellant had vide letters dated 19.3.2015 and 26.03.2016 had agreed for the enhanced value only to avoid detention and demurrages on the clearance of the goods and also vide letter dated 31.3.2015, appellant had requested for issuance of speaking order. The impugned order is legally not sustainable and is set aside. The issue stands remanded to the original authority for passing a speaking order on merits after hearing the appellant - appeal allowed by way of remand.

Summary

Issues:
The issues involved in the judgment are:
1. Whether the appellant can request a speaking order after accepting enhanced value for customs duty payment.
2. Whether the proper officer followed the procedures as per Customs Valuation Rules in rejecting the declared value of imported goods.

Issue 1: Request for Speaking Order
The appellant, M/s. Jai Hind Traders, filed Bills of Entry for 'Galvanised Steel Hollow Sections' from China and accepted the enhanced value for duty payment to avoid delays. The original authority rejected the request for a speaking order, stating the appellant had consented to the enhanced value without protest. The Commissioner (A) upheld the decision, citing Section 71 of the Customs Act, 1962, which requires self-assessment by importers. The appellant argued that they agreed to the enhanced value only to prevent detention and demurrages, and requested a speaking order. They contended that the authorities violated principles of natural justice by not following the Customs Valuation Rules in rejecting the declared value.

Issue 2: Compliance with Customs Valuation Rules
The appellant claimed that the proper officer did not provide reasons for rejecting the declared value and did not follow the procedures outlined in the Customs Valuation Rules. They highlighted that Rule 12(2) mandates the officer to inform the importer of doubts regarding the declared value and provide an opportunity to be heard before making a final decision. The appellant's requests for a speaking order were also disregarded. Citing legal precedents, including the case of Century Metal Recycling Pvt. Ltd. v. Union of India, the appellant argued that the assessment order was flawed and contrary to law due to the lack of cogent reasons for rejecting the declared value.

Conclusion
In light of the arguments presented and legal precedents cited, the Tribunal found the impugned order legally unsustainable. The issue was remanded to the original authority to pass a speaking order after hearing the appellant. The Tribunal allowed the appeals by way of remand, emphasizing the importance of providing reasons for rejecting declared values and granting importers an opportunity to be heard in customs valuation matters.