2004 (8) TMI 110 - SC - Customs

Settlement order (Customs) - Valuation - Writ petition - Withdrawal of earlier petition - Held that - withdrawal of the earlier writ petitions to enable the appellants to file rectification petitions would not show that the High Court on the earlier occasion had confirmed the original order passed by Settlement Commission. As a matter of fact in the writ petitions which have been disposed of by the impugned order the High Court was obliged to go into the question as to whether the original order dated 2-8-2001 passed by the Settlement Commission was in accordance with law or not but it has refrained itself from going into the said question - High Court was not justified in refusing to go into the merits of the original order passed by the Settlement Commission - Matter remanded back - Decided in favour of assessee.

Summary

Issues:
1. Dismissal of writ petitions by the High Court challenging the Settlement Commission's order.
2. Refusal of the High Court to examine the correctness of the original order passed by the Settlement Commission.
3. Interpretation of Rule 5(3) of the Customs Valuation Rules, 1988 regarding the determination of imported goods' value.

Issue 1: The Supreme Court heard the parties and granted leave to appeal against the High Court's dismissal of writ petitions (Nos. 266/2002 and 267/2002) challenging the Settlement Commission's order dated 2-8-2001. The appellants withdrew the earlier writ petitions to file rectification petitions before the Settlement Commission, which were subsequently rejected on the ground that there was no error apparent on the face of the record in the original order. The High Court dismissed the writ petitions on the grounds that it could not examine the correctness of the original order and that no error was apparent on the face of the record.

Issue 2: The Court held that the withdrawal of the earlier writ petitions did not confirm the original order passed by the Settlement Commission. The High Court refrained from examining whether the original order was in accordance with the law. The appellants argued that the Settlement Commission did not consider the lowest transaction value of identical goods, as required by Rule 5(3) of the Customs Valuation Rules, 1988. The Court opined that the High Court should have considered the merits of the original order, especially regarding the application of Rule 5(3).

Issue 3: The Court allowed the appeals, set aside the High Court's order, and remitted the matter for the High Court to examine the correctness of the Settlement Commission's order. The Court emphasized that it did not express any opinion on the merits of the original order, as that was for the High Court to determine upon remand. The parties were to be given an opportunity to be heard, and no costs were awarded in the case.