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2019 (8) TMI 1518 - AT - CustomsFinalization of provisional assessment - valuation of imported goods - slack wax and residue wax - allegation that there were a short levy of the Customs duty in the provisional assessments on the basis of allegation made in the show cause notice - adjudicating authority got changed, during the pendency of the adjudication procedure - new adjudicating authority denied the cross examination of the prosecution witnesses and also closed the proceedings - opportunity to the appellant for the inspection of the original/copies of document relied upon by the department not provided - principles of natural justice. HELD THAT:- The adjudicating authority has not permitted the cross examination of witnesses and also did not ask to permit the inspection of original or even photo copy of the document relied upon by the department. The reasons given by the adjudicating authority for not permitting the cross examination of the prosecution witnesses was that this will not lead to any conclusion of the case, is in complete disregard to the provisions of Section 138B of the Customs Act. The issue regarding the cross examination is settled by the various decisions of Hon’ble Supreme Court, High Court and decision of this Tribunal. It has been held in these cases that before placing reliance on the statements made the provisions of Section 138B has to be followed in letter and spirit. The adjudicating authority is required to examine the witnesses himself and come to the conclusion that the statement is relevant for adjudication of dispute before him and thereafter the cross examination is required to be permitted to the other side, which has not been done in these cases and settled principle of the law has been discarded on a flimsy ground that such process will delay the adjudication proceedings. The entire investigation is based on computer printout from the impugned order. We find that no separate investigation has been taken up against the appellant by the DRI but the entire price available on invoice found in the computer system of M/s Shree Abhishek India and Abhishekh India has been borrowed without justifying their extra potation in the case of appellants - the computer printout which have been taken up as the relevant material for establishing undervaluation by the appellant is not sustainable in eyes of law. Valuation of goods - HELD THAT:- The learned adjudicating authority has not followed the provisions of Section 14 of the Customs Act read with Customs Valuation Rules as extracted above. The adjudicating authority has discarded transaction value by applying the provisions of Rule 12 and arrived at the enhanced price in terms of Rule 9 of the Customs Valuation Rules read with Section 14 of the Act without following the sequential application of the rule 3, 4, 5, 7, 8 of Valuation Rules disregarding to the provisions of Customs Act and Rules made there under. Thus, the enhancement of the value ignoring the transaction value is not sustainable. The Department could not have issued the second show cause notice to the appellant for enhancing the valuation based on the data available in the computer printout recovered from M/s Abhishekh and Shree Abhishek India which we have legally held to be in inappropriate and illegal in terms of Section 138C of the Act - the Department has taken a stand before the Tribunal High Court and also before Hon’ble Supreme Court that assessment was provisional only on account of pending test report regarding oil content of the slack wax and residue wax and not on account of valuation is in fact contrary to the show cause notices. The show cause notice in its opening paragraph clearly indicates that the investigation was initiated for alleged undervaluation of slack wax and residue wax the test report was also one of the issue for such provisional assessment. The proper officer thus could not have finalized the provisional assessment ignoring the valuation issue is not correct. Appeal allowed - decided in favor of appellant.
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