2022 (4) TMI 83 - AT - Customs

Valuation of goods - undervaluation - levy of penalty - denial of cross examination of the persons whose statements have been relied upon - violation of principles of natural justice - non-application of mind - Section 138(B) of the Customs Act 1962 - HELD THAT - The finding portion of the adjudication order is verbatim to the allegation made in the show-cause notice and there is no clearcut finding given by the adjudicating authority with regard to the defence taken by the appellant during the course of adjudication. Moreover cross examination of the persons whose statements were relied upon by the adjudicating authority in adjudication order as well as while issuing the show-cause notice have not been granted. There is violation of principles of natural justice and the impugned order needs to be set aside - matter remanded back to the adjudicating authority for de-novo adjudication after granting cross-examination of the persons whose statements have been relied upon for issuance of the show-cause notice - appeal allowed by way of remand.

Summary

Issues:
Appeal against confirmed demand due to undervaluation and penalties imposed on all appellants.

Analysis:
The appellants appealed against an order confirming demand for undervaluation and imposing penalties. The appellants initially agreed not to rely on a specific Supreme Court decision. The appellants argued that denial of cross-examination of individuals whose statements were crucial for affirming undervaluation charges violated principles of natural justice. They also pointed out verbatim similarities between the show-cause notice and the adjudication order, indicating a lack of independent assessment. The respondent contended that evidence on record, supported by statements, was sufficient for adjudication, and cross-examination was unnecessary. The Tribunal noted the lack of clear findings by the adjudicating authority on the appellant's defense and the denial of cross-examination, concluding a breach of natural justice principles and setting aside the impugned order.

The Tribunal found that the adjudication order merely echoed the allegations in the show-cause notice without providing a distinct assessment of the appellant's defense. Additionally, the denial of cross-examination further indicated a violation of natural justice principles. As a result, the impugned order was overturned, and the matter was remanded to the adjudicating authority for a fresh adjudication. The Tribunal directed the authority to allow cross-examination of relevant individuals, consider the appellant's submissions, provide detailed findings on the defense, and issue an appropriate order in accordance with the law. Consequently, the appeals were allowed through remand, setting aside the initial order.

This comprehensive analysis highlights the issues raised by the appellants, the arguments presented by both parties, and the Tribunal's reasoning leading to the decision to remand the matter for a fresh adjudication, emphasizing the importance of natural justice principles and a thorough assessment of evidence in such cases.