2008 (3) TMI 273 - AT - Customs

Whether the appellant according free consent for enhancement of the value of imported old and used colour monitor by its letter forgoing right to SCN can resile and challenge the order of adjudication made in accordance with the prayer for redetermination of value of the said goods held that appellant s concurrence for enhancement of value established conduct of under-valuation hence assessment done was not impeachable as mala fide intention not proved redemption fine is reduced

Summary

Issues involved:
Determining consent for enhancement of imported goods' value and challenging adjudication order based on consent waiver and valuation process.

Analysis:
The appeal involved the question of whether the appellant, by giving free consent for the enhancement of the value of imported goods and waiving the right to a Show Cause Notice (SCN), could challenge the subsequent adjudication order based on the enhanced value. The appellant had imported old and used color monitors, and the customs authorities directed re-determination of the value by a Chartered Engineer due to non-competitive disclosed value. The appellant, through a letter, consented to the proposal, waived the right to SCN, and agreed to the enhancement of the goods' value. The value determined by the Chartered Engineer was adopted for adjudication, resulting in the confiscation of goods with an option to redeem by paying a fine and imposition of a penalty under the Customs Act, 1962.

The appellant contended that the consent given was misused, emphasizing the necessity of an SCN for adjudication. The appellant argued that the valuation process was unnecessary as the genuineness of the invoice was not disputed by the department. The appellant claimed that the adjudication order lacked a basis for rejecting the claimed price as non-competitive. The appellant's counsel argued that the entire adjudication process violated principles of natural justice, as the Chartered Engineer's valuation was not presented to the appellant for rebuttal.

The Revenue's representative argued that the appellant's consent for valuation and waiver of rights precluded any challenge post-adjudication. The Revenue contended that the appellant's conduct indicated a premeditated intention to litigate on technical grounds. It was argued that the appellant's consent to the value enhancement implied misdeclaration through under-valuation, justifying the dismissal of the appeal.

The Tribunal, after hearing both sides and reviewing the record, found that the appellant's objections to the valuation process were unsubstantiated. The Tribunal noted that the appellant's consent and waiver of rights were clear from the letter dated 8-3-04, and the valuation was conducted following due process with the appellant's free consent. The Tribunal emphasized that the appellant's decision to forgo the right to reply to the SCN and not participate in the hearing process precluded any challenge to the valuation post-adjudication. The Tribunal concluded that the adjudication order was valid, as the appellant could not retract its earlier consent.

In light of the above observations, the Tribunal found no legal infirmity in the adjudication order based on the uncontroverted Chartered Engineer's report. While acknowledging the conduct of under-valuation, the Tribunal reduced the redemption fine imposed, considering the absence of clear evidence of mala fide intention. The Tribunal rejected the appeal except for the reduction in the redemption fine, thereby upholding the adjudication order.

This detailed analysis of the judgment highlights the key legal issues, arguments presented by both parties, and the Tribunal's reasoning leading to the decision.