2014 (1) TMI 1220 - AT - Customs

Valuation goods - Import of palm fatty acid distillate - Mis declaration of goods as mixed acid oil or palm fatty acid or mixed fatty acid - Confiscation of goods - Held that - from the perusal of the show cause notice, it is clear that the statement of Shri Rakesh Kumar, the indenter of the foreign supplier has been relied upon as evidence of under-invoicing against the appellants as in this statement he had implicated the appellants by stating that while it is palm fatty acid distillate, which was being imported, the same in order misdeclared its value was being mis-declaring as mixed fatty acid and that as against prevailing price of 340 U.S. per M.T. for palm fatty acid distillate, the suppliers were declaring the price as 180 U.S. per M.T. and the balance was being paid to the suppliers by the importers in advance through unofficial channels - since the appellant had given reasons for seeking cross- examination of Shri Rakesh Kumar, the same cannot be denied just on the ground that he is a co-noticee and cannot be compelled to give evidence which will incriminate himself - Decided in favour of assessee.

Summary

Issues:
Alleged under-declaration of imported goods value through mis-declaration.

Analysis:
The appellants were accused of importing palm fatty acid distillate by mis-declaring it as "mixed acid oil or palm fatty acid or mixed fatty acid," resulting in a gross under-declaration of the goods' value. The show cause notice sought to reject the declared transaction value, recover differential duty, confiscate the goods under Customs Act provisions, and impose penalties. Evidence included a statement from Shri Rakesh Kumar and a report from the Chemical Examiner. The appellants requested cross-examination of these witnesses, which was denied by the Commissioner. The appeals were filed against this decision.

The appellants argued that the denial of cross-examination violated principles of natural justice, citing relevant case law. They emphasized the importance of cross-examining witnesses relied upon for allegations. The Commissioner's reasoning based on Article 20(3) of the Indian Constitution was challenged, stating that witnesses cannot refuse to answer relevant questions. The appellants also sought to cross-examine the Chemical Examiner, crucial for ascertaining the testing method.

The Departmental Representative contended that the Commissioner's decisions disallowing cross-examination were not appealable orders. However, the Tribunal found that the Commissioner's letters refusing cross-examination constituted appealable decisions under Section 129A(1)(a) of the Customs Act. The Tribunal analyzed the evidence, including Shri Rakesh Kumar's statement and the Chemical Examiner's report, emphasizing the right of the appellants to cross-examine witnesses. Citing legal precedents, the Tribunal concluded that the denial of cross-examination was unjustified, ordering the Commissioner to permit cross-examination of the witnesses during adjudication proceedings. Consequently, the impugned orders were set aside, and the appeals were disposed of in favor of the appellants.