2017 (6) TMI 962 - AT - Customs

Valuation - import of old/defective/Cold Rolled Grain Oriented Silicon Steel (CRGO) Sheets/Strips - rejection of declared value - rejection transaction value and re-determination of the sustainable value on the basis of report of Chartered Engineer and market survey to enhance the value of the imported goods which was mis-declared and mis-classified by the appellant - natural justice - Held that - the Revenue has heavily relied on the examination report of the Chartered Engineer and market survey. The appellant has specifically asked for cross examination of Chartered Engineers and the persons to whom the market survey was conducted but the cross examination has not been granted by the adjudicating authority in casual manner - the impugned order is in gross violation of principle of natural justice. As there is gross violation of principle of natural justice, the matter is remanded back to the adjudicating authority to pass the order after following the principle of natural justice and as per the provisions of Section 138 (1)(b) of the CA, 1962 - appeal allowed by way of remand.

Summary

Issues:
Appeal against rejection of declared value, duty demand, and penalty imposition.

Analysis:
The appellant, engaged in importing iron & steel products, faced issues when intelligence suggested mis-declaration of old/defective CRGO sheets/strips as Heavy Melting Scrap, violating CBEC instructions. The goods were examined, revealing new CRGO steel strips. Legal battles ensued, with the High Court permitting provisional release. Subsequent investigations led to conflicting opinions on the goods' quality and usability, resulting in duty demand and penalty imposition.

The appellant argued against value enhancement based on a Chartered Engineer's report, citing precedent that dismantled transformers' materials should be treated as scrap, not defective goods. Additionally, they challenged the market survey's validity, referencing a tribunal case that emphasized the importance of commercial considerations in determining transaction value.

Moreover, the appellant highlighted a Calcutta High Court case emphasizing the need for fair proceedings and the right to cross-examine witnesses. They contended a violation of natural justice principles due to the lack of cross-examination. The tribunal agreed, setting aside the order and remanding the case for a fair hearing.

Ultimately, the tribunal found a gross violation of natural justice, remanding the matter for proper adjudication in line with the Customs Act. All issues raised by the appellant were kept open for consideration upon remand, with a directive for the adjudicating authority to decide promptly within three months.