2023 (12) TMI 188 - AT - Customs

Valuation and assessment of imported goods - Artificial PU, and leather cloth of varied thickness - Enhancement of value on the basis of NIDB data as well as contemporaneous evidence available in the EDI system - enhancement without disclosing any reason or passing any speaking order under Section 17(5) of the Customs Act - principles of natural justice - HELD THAT - The law is amply clear in the matter and that any rejection of declared value and its re-determination has to be qualified by way of a speaking order issued in terms of Section 17(5) of the Customs Act - It goes without saying that the issuance of a speaking order is the basic minimum for adherence and compliance with the principles of natural justice. In the absence of any order in writing regarding reassessment and revaluation, the same can at best be cryptic and arbitrary with no cogent justification for rejection of the declared value. It is an admitted position that no orders as warranted in terms of Section 17(5) were issued by the department in the present matter. Moreover, no show cause notice was also issued to the appellant. There are no illegality in the impugned order passed by the learned Commissioner (Appeals). We note that the appeal filed by the revenue is bereft of substance and merit, in as much as no reasonable opportunity has been given to the respondents to present their case. The revenue has not doubted the importers invoice submitted at the time of assessment. No re-valuation of the goods imported can be directed in law without first rejecting the transaction value. Therefore, the Commissioner (Appeals) has rightly rejected the order passed by the lower authority, enhancing the transaction value declared, without spelling out any reasons thereof. There are no merit in the appeal filed by the department - appeal of Revenue dismissed.

Summary

Issues: Valuation and assessment of imported goods

The appeal was filed by the department against the Order in Appeal passed by the Commissioner of Customs, Kolkata concerning the valuation and assessment of imported goods, specifically Artificial PU and leather cloth imported against seven bills of entries. The dispute revolved around the department's decision to enhance the assessable values of the imported goods based on NIDB data and contemporaneous evidence in the EDI system, without providing a speaking order under Section 17(5) of the Customs Act.

Valuation and Assessment Process

The Tribunal emphasized the necessity of issuing a speaking order under Section 17(5) of the Customs Act when rejecting the declared value and re-determining the assessable value of imported goods. The law requires that any reassessment contrary to the self-assessment done by the importer must be accompanied by a detailed order within fifteen days. Failure to provide a speaking order results in an arbitrary and unjustified valuation process, as seen in this case where no such order was issued by the department.

Legal Compliance and Natural Justice

The Tribunal highlighted that adherence to natural justice principles, including the issuance of a speaking order, is fundamental in reassessing the value of imported goods. In this instance, the absence of a written order regarding reassessment and revaluation rendered the department's actions arbitrary and lacking justification. The Commissioner of Customs (Appeals) also noted that the import was based on genuine trading agent's invoices, with no evidence of misdeclaration or contravention of valuation rules.

Decision and Dismissal of Appeal

Ultimately, the Tribunal found no merit in the department's appeal, upholding the decision of the Commissioner of Customs (Appeals) to set aside the assessment orders and direct re-assessment based on the declared invoice value. The appeal lacked substance and failed to provide the respondents with a reasonable opportunity to present their case. The Tribunal dismissed the department's appeal, emphasizing the importance of following legal procedures and principles of natural justice in valuation and assessment matters.