2019 (12) TMI 785 - AT - Customs

Principles of Natural Justice - Valuation of imported goods - MDF with Veneer Face - rejection of declared value - Rule 10A of the Customs Valuation Rules, 1988 - case of appellant is that the order has been passed in gross violation of natural justice as they were not heard before the order was passed in the matter - HELD THAT - Undisputedly in the present cases the charges of mis-declaration of value and quantity in the present cases has been made on the basis of e-mail correspondences between the foreign supplier and another importer M/s SGS Corporation. On the basis of the e-mail correspondences and statements recorded during the course of investigation charges of under valuation and misdeclaration of quantity made against the present appellants. Such cases were the evidences that are being relied upon need to be established in the adjudication proceedings in terms of Section 138B and 138C of the Customs Act, 1962. In such case where the evidences relied upon by the revenue are not direct but have been recovered during the investigations against some party, in present case M/s SGS Sales Corporation, the relevance of personal hearing in the adjudication proceedings increase many fold. Since the order has been passed without hearing the appellants in the facts and circumstances of these cases we are constrained to observe that orders have been passed in violation of principles of natural justice. Appeals are allowed by way of remand to the adjudicating authority to afford an opportunity of personal hearing to the appellants.

Summary

Issues:
1. Valuation of imported goods under Customs Act, 1962.
2. Confiscation of goods and imposition of penalties.
3. Allegations of misdeclaration of quantity and value.
4. Violation of principles of natural justice in passing the order.

Issue 1: Valuation of imported goods under Customs Act, 1962:
The Commissioner Customs (Import) Mumbai I passed orders rejecting the declared assessable value of certain consignments under Rule 10A of the Customs Valuation Rules, 1988. The revised assessable value under Section 14(1) of the Customs Act, 1962 was adopted for customs assessment. Duties were demanded along with interest, and confiscation of goods was ordered under Section 111(m) of the Customs Act, 1962. Penalties were imposed on the importers and partners of the importing companies under various sections of the Customs Act, 1962.

Issue 2: Confiscation of goods and imposition of penalties:
The orders included directions for confiscation of the imported goods valued at a revised amount, with an option for redemption upon payment of a specified fine. Additionally, substantial penalties were imposed on the importing companies and their partners for alleged violations under the Customs Act, 1962.

Issue 3: Allegations of misdeclaration of quantity and value:
Investigations revealed a discrepancy between the declared value and the actual value of the imported goods. Evidences such as email communications and statements of involved parties indicated undervaluation and misdeclaration of quantity. Show cause notices were issued alleging misdeclaration of quantity and value, leading to the initiation of adjudication proceedings and the subsequent impugned orders.

Issue 4: Violation of principles of natural justice in passing the order:
The appellants raised concerns regarding the violation of natural justice, claiming they were not given a fair hearing before the orders were passed. The Commissioner's order was challenged on the grounds of procedural irregularities, specifically the appellants' absence during scheduled hearings. The Tribunal observed that the orders were passed without an effective hearing, leading to a remand of the matter back to the adjudicating authority for a proper opportunity of personal hearing to the appellants.

In conclusion, the Tribunal allowed the appeals by way of remand to ensure the appellants receive a fair hearing and directed them to cooperate in the adjudication proceedings. The Tribunal emphasized the importance of adhering to principles of natural justice and keeping all issues open for the consideration of the adjudicating authority.