2024 (12) TMI 98 - AT - Customs

Seeking release of confiscated goods - undervaluation of goods - misuse of Country of Origin certificates declaring the subject to be of Afghanistan and USA Origin wrongly claiming benefit under SAFTA - it is alleged that the consignments which actually arrived in India had sailed from Dubai and never from Afghanistan and that these certainly cannot be equated or identified with the consignments which might or might not have been checked by Nangarhar Chamber of Commerce in Afghanistan - failure to comply with mandate of Section 138 B of the Customs Act 1962 - impugned orders have been passed in haste - violation of principles of natural justice - HELD THAT - It is found that the way impugned orders have been passed in haste and in gross violation of principles of natural justice it should have been avoided by the learned Adjudicating Authority being a quasi judicial authority as it amounts to generation of unnecessary repeated litigation which is prejudicial to both the parties. It is found that the appellants vehemently argued that there is a gross violation of principles of natural justice in passing of adjudication order with pre determined bias and prejudice against the appellants in as much as documents as requested for by the appellants were not supplied to them. As per the Notification No. 21/2015-20 New Delhi dated 25.07.2018 issued by Government of India Ministry of Commerce and Industry Department of Commerce Directorate General of Foreign Trade it prima facie appears that condition of minimum import price will not be applicable for imports by Units in SEZ therefore this notification also prima facie supports the case of the appellants that since admittedly the goods were meant for appellants warehousing in SEZ the condition of minimum import price will not be applicable. This vital aspect has not been examined by the adjudicating authority. It is also observed from the submission of the appellant that the statements recorded under Section 108 were straight away relied upon by the Adjudicating Authority without following the mandate of Section 138 B of the Customs Act 1962. From Section 138B it is mandatory that the requirement of examination in chief and thereafter cross- examination and re-examination of the witnesses is required to be conducted to make the statements as admissible evidence. However the learned commissioner has not complied with the provision of Section 138B which makes the impugned order unsustainable. There is a serious lapse on the part of the adjudicating authority in non compliance of the principles of natural justice - the entire matter needs to be re-considered. Needless to say that the appellant shall be supplied all the required documents and they shall be given sufficient opportunity of making their defence and appearance for the personal hearing and thereafter the adjudicating authority shall pass the reasoned and speaking de- novo order. The impugned order is set aside - the appeals are allowed by way of remand to the adjudicating authority.

Summary

Issues:
1. Impugned demands and penalties imposed by Commissioner of Customs
2. Allegations of undervaluation and misuse of Country of Origin certificates
3. Violation of principles of natural justice in passing the impugned order
4. Compliance with procedural requirements under the Customs Act
5. Request for remand for fresh consideration

Analysis:

Issue 1: Impugned demands and penalties
The appellants imported goods below CIF value and faced allegations of using forged Country of Origin certificates. The goods were trans-shipped to different locations for warehousing. Seizure of goods was made under Customs Act sections, leading to demands and penalties.

Issue 2: Undervaluation and misuse of certificates
The appellants were accused of undervaluing goods and misusing Country of Origin certificates to claim benefits under SAFTA. The genuineness of the certificates was verified by FTA Cell and MEA. The impugned order raised concerns about the authenticity of the certificates and duty payments.

Issue 3: Violation of natural justice
The appellants argued that the impugned order was passed in haste and with bias, violating principles of natural justice. Documents crucial to the case were not provided, and the order was deemed premature. The Adjudicating Authority was criticized for not following proper procedures.

Issue 4: Compliance with procedural requirements
The Adjudicating Authority was faulted for relying on statements without proper examination and cross-examination as mandated by the Customs Act. The failure to adhere to Section 138B rendered the impugned order unsustainable, necessitating a re-consideration of the case.

Issue 5: Request for remand
Considering the serious lapses in the impugned order, the Appellate Tribunal set aside the order and remanded the case to the adjudicating authority. The appellants were directed to be provided with necessary documents and given a fair opportunity to defend themselves before a new order is passed.

In conclusion, the Appellate Tribunal found merit in the appellants' arguments regarding procedural irregularities and violations of natural justice in the impugned order. The case was remanded for fresh consideration, emphasizing the importance of adhering to legal procedures and ensuring a fair hearing for all parties involved.