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TMI Blog2013 (9) TMI 546X X X X Extracts X X X X X X X X Extracts X X X X ..... ectorate of Revenue Intelligence (DRI in short) had intelligence that M/s. Associated Aluminium Industries Pvt. Ltd., Silvassa, were indulging in illegal import of aluminium scrap by misdeclaring the value of the scrap, so as to evade Customs duty. They conducted a search of factory office premises of the appellant on 13/03/2006 and recovered incriminating documents relating to import of aluminium scrap during 2004-2005 and 2005-2006 under a Panchnama dated 13/10/2006. Apart from the documents, a pen drive used by the Director of appellant firm, Shri Raghav Daga was also recovered. The said pen drive was sent to the Director of Forensic Science (Computer Forensic), Gandhi Nagar for retrieval of the data contained therein. The Director of Fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f scrap based on the metal content of the scrap. 2.3 On conclusion of the investigation, a show cause notice dated 31/01/2008 was issued to the appellant proposing to revise the price declared by them for import of the scrap through JNCH, Nava Sheva and Customs House, Kandla. The imports at Nhava Sheva is in respect of the thirty two consignments of aluminium scrap, wherein the value has been proposed to be re-determined at Rs.13,98,94,381/- as against Rs.10,68,43,077/- as declared in the documents. Similarly, in respect of another 268 consignments, the value has been proposed to be re-determined at Rs.91,32,56,703/- as against the declared value of Rs.77,23,65,226/-. Consequently, a differential duty demand of Rs.5,34,87,667/- has been pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... trieved from the pen drive and these seven files did not contain any incriminating evidence against the appellant. However, after a few days on the request of the DRI, the pen drive was re-examined and additional files were retrieved from the said pen drive. This examination/re-examination has been done at the back of the appellant and they were not aware of these details. They had sought for cross-examination of the Investigating Officer of the DRI and also the Officers of the Directorate of Forensic Science, which was denied to them. They wanted a cross-examination of Officers of the Directorate of Forensic Science for the reason that there is an un-certainty about the pen drive which have examined and also a re-examination has been done ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be done under Rule 8 and even as per the said Rule, the procedure adopted should be consistent with Section 14 of the Customs Act and the Customs Valuation Rules. In the present case, a strange and arbitrary method has been adopted on the ground that prices of similar or identical goods are not available. The appellant had sought and obtained under RTI, prices of similar/identical goods imported through both the Nhava Sheva Custom House and Kandla Custom House during the impugned period and had submitted the details of such imports to the adjudicating authority and the data obtained shows that the prices declared by the appellant are for higher than those declared in respect of similar or identical goods accepted by the Customs authorities ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en drive, it was incumbent upon the adjudicating authority to clear and clarify the matter, by allowing cross examination of the concerned witnesses. Thus there is a clear violation of the principles of natural justice. 5.3 It is also seen from the records that vide letter No. D/E/2007/CF/13 dated 03/07/2007 the said Directorate has communicated that in case the evidence is necessary seems to be issued in the name of S.V. Sanghvi, Scientific Officer, Directorate of Forensic Science subject to payment of TA/DA by the department as per his entitlement. In these circumstances, denial of cross examination of the officer, who examined the pen drive has caused prejudice to the appellants and therefore, on this ground alone the impugned order is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... E quote with that of other respective scarp pricing as reported earlier if such linkage exists. It is done on a case to case basis between the buyer/seller based on mutual understanding. 5.6 From the above, it is clear that there no formal public study conducted by LME indicating any co-relation between the prime metal price and the scrap price. If that be so, the department cannot adopt any procedure which LME itself does not recognize. Therefore, the valuation done in the impugned order is not in accordance with the law and consequently the demand of differential duty and imposition of penalties cannot be sustained in law. 6. In view of the above position, we are of the considered view that the matter has to go back to the adjudicating ..... X X X X Extracts X X X X X X X X Extracts X X X X
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