2009 (8) TMI 444 - AT - Customs

Valuation- Comparable Import-there was a search conducted to the residential premises of the Appellant, revenue had made the allegation that the impugned consignment are undervalued. The department valued the consignment at 1.15 US while for the similar goods, the valuation adopted was 2.15 US . Such method of valuation is not based on any basis or any cogent evidence. Held that the claim of importer allowed as they could not be treated unequally before law. Evidence-Statement-Retracted before Magistrate No reliance can be put on it especially if there is no collateral evidence to show that retraction was mala fide or ill motivated or deponent was gained over by unjust enrichment or motive-such retraction shifts burden of proof and what was stated before retraction needs to be supported/corroborated by cogent evidence. that the appellant was neither been issued a show cause notice nor been charged with any offence. Held that- as the show cause notice not issued on this ground the appellant succeed.

Summary

Issues:
- Valuation of imported consignment of Nylon Yarn
- Comparability of goods imported by the appellants
- Reliability of evidence and retracted statements
- Denial of natural justice to one of the appellants

Valuation of Imported Consignment:
The appellants contested the arbitrary valuation of the imported consignments of Nylon Yarn by Customs, arguing that the valuation lacked material evidence and was not based on any cogent basis. They highlighted discrepancies in valuation between different batches of consignments, emphasizing the lack of evidence to support the comparability of goods. The appellants challenged the adjudication order, claiming that the goods were not tested in any laboratory for appropriate valuation, and opposed the reliability of evidence presented against them. The appellants also raised concerns about the denial of natural justice to one of them, asserting a pre-determined bias against him. The Revenue, on the other hand, attempted to justify the valuation based on evidence such as packing slips and specifications of the imported goods. However, the lack of direct evidence and technical test reports raised doubts about the validity of the valuation.

Comparability of Goods:
The central question in the appeals revolved around the comparability of the goods imported by the appellants with those imported by another entity. The Revenue claimed that the goods were comparable based on invoices and specifications, but the absence of technical test reports and concrete evidence undermined this argument. The Tribunal emphasized that for goods to be considered comparable, they must share similar characteristics, specifications, and features perceptible to the senses, which were not adequately demonstrated in this case. The lack of cogent evidence to establish comparability led to the conclusion that the goods were not proven to be alike, rendering the Revenue's valuation questionable.

Reliability of Evidence and Retracted Statements:
The issue of retracted statements and the reliability of evidence played a crucial role in the judgment. The appellants contested the credibility of statements recorded during the investigation, pointing out subsequent retractions and lack of corroborating evidence. The Tribunal highlighted the temporary nature of oral evidence and the significance of retraction, shifting the burden of proof to the Revenue to substantiate the initial statements. Without collateral evidence to support the claims made before retraction, the Tribunal found the retracted statements to be valid and emphasized the importance of corroborative evidence in legal proceedings.

Denial of Natural Justice:
One of the appellants, Pankaj Gandhi, raised a specific issue regarding the denial of natural justice due to the absence of a show cause notice and formal charges against him. The Tribunal acknowledged this legal ground for the appellant's plea, highlighting the importance of due process and procedural fairness in legal proceedings. The failure to issue a show cause notice constituted a violation of natural justice, leading to a favorable outcome for this appellant based on procedural irregularities.

In conclusion, the Tribunal allowed all three appeals due to the lack of evidence to support the comparability of goods, questionable valuation practices, unreliable evidence, and procedural deficiencies leading to the denial of natural justice. The judgment underscored the importance of concrete evidence, procedural fairness, and the burden of proof in legal proceedings related to customs valuation disputes.