1995 (11) TMI 168 - AT - Customs

Summary

Issues Involved:
1. Jurisdiction of Bombay Customs Authority
2. Bona fides of Intended Transhipment
3. Violation of Principles of Natural Justice
4. Erroneous Valuation
5. Non-service of Show Cause Notice within Six Months

Issue-wise Detailed Analysis:

1. Jurisdiction of Bombay Customs Authority:
The appellants contended that the Bombay Customs authority had no jurisdiction to seize or initiate confiscation proceedings as the goods were intended for transhipment to Calcutta. The court examined Sections 46, 53, and 54 of the Customs Act, 1962. It was determined that the goods consigned from Hong Kong landed at Bombay for transhipment to Calcutta, and the consignee was shown as Shree Electronics, G-41, Noida, Ghaziabad. The court concluded that the expression "may allow goods to be transhipped" in Section 54(3) has a compulsive force, meaning that the proper officer is obliged to allow the goods to be transhipped to Calcutta if the conditions and prescriptions are satisfied.

2. Bona fides of Intended Transhipment:
The court found that the goods were intended for transhipment to Calcutta, and the appellants had repeatedly written to the customs authority at Bombay requesting for onward transhipment. However, the appellants did not present a bill of transhipment and application as required by Section 54(1) of the Act and the Regulations. Therefore, the Bombay customs authority was justified in detaining the goods and initiating adjudication proceedings.

3. Violation of Principles of Natural Justice:
The appellants argued that the impugned orders were vitiated due to a violation of principles of natural justice, as they were not given an opportunity of hearing and copies of all relied documents were not furnished. The court noted that the necessity for a hearing would arise only if a bill of transhipment was presented. Since the bill was not presented, the question of hearing did not arise. However, it was found that copies of certain documents were not furnished, which amounted to a violation of principles of natural justice.

4. Erroneous Valuation:
The appellants contended that the valuation made in the impugned order was erroneous and lacked basis. The court observed that the show cause notice and the impugned order did not indicate the basis for arriving at the CIF value and market value. The authority had relied on comparative studies of invoices from M/s. Prosound Products and M/s. Unisound Pvt. Ltd., but did not disclose these to the appellants. The absence of disclosure of the valuation basis rendered the valuation unacceptable.

5. Non-service of Show Cause Notice within Six Months:
The appellants submitted that they would urge this contention before the appropriate authority, and it would be premature for the Tribunal to consider it. This submission was recorded by the court.

Conclusion:
The impugned order was set aside. The Collector of Customs, Airport Bombay, was directed to furnish the appellants with copies of the invoices relied on and the method of arriving at the CIF value and market value. The appellants were to be given an opportunity to produce materials and a hearing before a fresh order was passed in accordance with the law. The appeals were allowed in this manner.