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2025 (2) TMI 429 - AT - CustomsValuation of imported goods - electronic calculators - rejection of delared value - redteremination of value of the consignment on per piece basis - rule 4 to 9 of CVR 2007 - market enquiry report has not been provided to the appellant - violation of princuples of natural justice - HELD THAT - The erstwhile Rule 10A of CVR 1988 had a provision for the rejection of declared value and it came to be replaced by a more elaborate Rule 12 after the introduction of CVR 2007. However what is of interest is the rationale for introduction of a provision for rejection of the declared value. However over a period of time the Customs Valuation (Determination of Price of Imported Goods) Rules have come to be modified and the 2007 version is now dealt with the circular brings out the difficulty in rejecting a declared value even though in some cases invoices were found to be manipulated but on the face of it the transaction value (i.e. the invoice price) is projected to be true and correct or the value was found to be substantially lower than the prevailing international market price. The Issue does not appear to be localised to India alone as the circular mentions that the Rule has been added to give effect to the decision taken by the Ministers of the Countries which are signatories to GATT 1994. The Rule thus seeks to address the mischief of manipulated values declared by some importers by not correctly disclosing the transaction value based on documents which are in their exclusive possession . In the present case the market enquiry report has not been provided to the appellant showing the results of the survey and with a work sheet as to how the value was arrived at. This has effectively disadvantaged the appellant from giving a reply and violates the principles of natural justice. In Commissioner of Sales Tax U.P. v. R.P. Dixit Saghidar 2000 (3) TMI 992 - SUPREME COURT it was held that when principles of natural justice are stated to have been violated it is open to the appellate authority in appropriate cases to set aside the order and require the Assessing Officer to decide the cases de novo. This is because when an order is held to be invalid due to a violation of principles of natural justice there is no final decision of the case and therefore proceedings are left open and the proceedings are not terminated. This being so it is felt appropriate to remand the matter to the Original Authority to cure the defect by supplying a copy of the Market Inquiry Report and worksheet to the appellant and decide the matter afresh. Conclusion - The original authority must provide the appellant with the market enquiry report and worksheet allowing them to respond before issuing a new decision. Matter remanded to the original authority for fresh adjudication. Appeal disposed off by way of remand.
The legal judgment involves an appeal against an order by the Commissioner of Customs (Appeals - II), Chennai, concerning the redetermination of the assessable value of imported electronic calculators. The core issues and their detailed analysis are as follows:
1. Issues Presented and Considered The primary issues considered in this appeal are:
2. Issue-wise Detailed Analysis Rejection and Redetermination of Declared Value The relevant legal framework involves Rule 12 of the CVR 2007, which allows a proper officer to reject the declared value if there is a reasonable doubt about its truth or accuracy. The court referred to the Supreme Court's interpretation in Century Metal Recycling Pvt. Ltd. v. Union of India, which outlines the procedural steps for rejecting a declared value and determining a new value under Rules 4 to 9 of CVR 2007. The court noted that the original authority had reasonable doubt about the truth or accuracy of the declared value due to the abnormally low unit price and Retail Sale Price (RSP) declared for the calculators. The original authority followed the first stage of redetermination by rejecting the declared value but failed to provide the appellant with the market enquiry report used to determine a new value, violating principles of natural justice. Principles of Natural Justice The court emphasized the importance of adhering to principles of natural justice, particularly the right to be heard and the right to receive evidence used against a party. The failure to provide the market enquiry report to the appellant denied them the opportunity to respond adequately, thus violating these principles. The court referenced the case of Commissioner of Sales Tax, U.P. v. R.P. Dixit Saghidar, which supports remanding a case for de novo adjudication when there is a violation of natural justice. 3. Significant Holdings The court held that the original authority had a reasonable basis to doubt the declared value but failed to comply with procedural requirements by not providing the market enquiry report to the appellant. This omission constituted a violation of the principles of natural justice. The court concluded that the matter should be remanded to the original authority for fresh adjudication. The original authority must provide the appellant with the market enquiry report and worksheet, allowing them to respond before issuing a new decision. This process must adhere to the principles of natural justice, ensuring the appellant has a reasonable opportunity to present their case. The appeal was disposed of with the direction for de novo adjudication, and the appellant was granted eligibility for consequential relief as per the law.
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