2023 (8) TMI 425 - HC - Customs

Violation of principles of natural justice - Scope of the order of the Tribunal - appeal filed by the Appellant dismissed without hearing the case on merits on the ground that the Commissioner (Appeals) had remanded back to the original authority for re-adjudication, when in fact the remand was only for a limited purpose of re-quantification of customs duty - refusing to correct the error apparent on record in its final order on the ground that the order was dictated in the presence of the counsel. HELD THAT - The Appellant is correct in contending that the Commissioner (Appeal) had given a finding on merits against the Appellant by observing that royalty under the Technical Assistance Agreement is required to be added under Rule 10(c) of the Customs Valuation Rules, 2007 rejecting the contention of the Appellant that same cannot be added under the Customs Valuation Rules, 2007. The Commissioner (Appeal) after having given a finding on merits against the Appellant remanded the matter to the Original Authority for ascertaining the quantum of the amount to be added for arriving at the transaction value. The Appellant in its appeal before the Tribunal has challenged the said finding of the Commissioner (Appeal) on merits that no addition could be made on payments made under the Technical Assistance Agreement for under the Customs Valuation Rules, 2007. If the Appellant succeeds on the merits, then the question of quantification would not arise. The Tribunal has not considered paras 5 and 6 of the Commissioner Appeal s order in proper perspective, and has merely got carried away by the remand, without realising that there was a finding on merits against the Appellant and which was challenged before the Tribunal - The Tribunal ought to have adjudicated the appeal of the Appellant on merits and was not justified in observing that no adjudication on merit is warranted because of the matter having remanded to the original authority. The order of Tribunal set aside - appeal restored back to the fle of the Tribunal with a direction to decide the said appeal on merits - The question of law is answered in favour of the Appellant and against the revenue.

Summary

Issues involved:
The issues involved in the judgment are (a) Whether the Tribunal erred in dismissing the appeal without hearing the case on merits, and (b) Whether the Tribunal was right in refusing to correct the apparent error in its final order.

Judgment Details:

Issue 1: Tribunal's Dismissal of Appeal Without Hearing on Merits

The appellant, a start-up company in the automotive industry, imported goods from a related party. The Commissioner of Customs concluded that the imports were at arm's length and acceptable as "transaction value." However, the Commissioner of Customs (Appeals) directed a remand for quantification under Rule 10(c) of the Customs Valuation Rules. The Tribunal dismissed the appeal, citing the remand for further fact-finding. The High Court held that the Tribunal should have considered the Commissioner (Appeal)'s finding on merits against the appellant. The Court emphasized that if the appellant succeeded on merits, quantification would not be necessary. The Tribunal's failure to adjudicate on the merits was deemed unjustified, leading to the setting aside of the Tribunal's orders.

Issue 2: Refusal to Correct Apparent Error in Final Order

Following the dismissal of the appeal, the appellant applied for a rectification of the Tribunal's order, which was rejected on the grounds that the order was pronounced in the presence of the advocates. The High Court found that the rejection of the rectification application was not sustainable, as the Tribunal had erred in dismissing the appeal without considering the merits. Consequently, the High Court set aside the Tribunal's orders and directed the Tribunal to decide the appeal on its merits, emphasizing the need for expeditious resolution.

In conclusion, the High Court set aside the Tribunal's orders, restoring the appeal for a decision on merits. The judgment favored the appellant, emphasizing the importance of considering the merits of the case before resorting to remand or dismissal without proper adjudication.