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2024 (4) TMI 485 - AT - CustomsValidity of Show Cause Notices issued for revision of the assessable value and customs duty - Undervaluation and Mis-declaration of the goods imported - bypass the normal Customs Channels and clear the imported goods into domestic area by resorting to gross undervaluation and thereby defrauding the government exchequer by evading the payment of higher customs duty - demand for differential Customs Duty - confiscation - reasons to believe - Penalty under the provisions of Section 112(a) & (b)/114A and 114AA - No independent inquiry / investigation with respect to goods imported - No opportunity of Personal Hearing - HELD THAT:- The SCNs i.e. SCN dated 09.02.2022 read with Corrigendum dated 11.02.2022 and SCN 14.02.2022 have been adjudicated by the Ld. Commissioner ex parte vide the impugned OIO MUN-CUSTOM- 000- COM-14-23-24 dated 20.09.2023 without affording any opportunity of Personal Hearing to the Appellant by applying the said value as proposed in the SCN dated 08.09.2021 i.e. the first S.C.N to the subject Bills of Entry and accordingly, have confirmed the entire demand along with interest and has also imposed penalty equal to the confirmed duty. In addition, penalty u/s 114AA has also been imposed. It is further found that DRI has been stated to have developed an intelligence to the effect that one M/s Zip Zap Exim Pvt. Limited ("M/s ZZEPL"), a trading unit in Special Economic Zone, Kandla (Gujarat) ("KASEZ" ) was importing Knitted Polyester Fabrics and various other Electrical goods and subsequently, clearing the same into DTA to various DTA importers including the Appellant by resorting to gross undervaluation. On the basis of said purported intelligence, an investigation was conducted and after completion of the same, a show cause notice dated 08.09.2021 was issued to M/s ZZEPL & other DTA buyers including the Appellant proposing rejection of value declared by said SEZ Unit and demanding differential duty along with interest from DTA buyers (including the appellant) with respect to respective imported goods. Said show cause notice dated 08.09.2021 is yet to be adjudicated as per verification got done through Authorized Representative, which has revealed that matter was still to be adjudicated in that show cause notice. However, the learned Adjudicating Authority, has adopted the value proposed to be re-determined in the said SCN and confirmed the demand accordingly. Thus, determination of value proposed in the SCN is done u/s 28 (8) by depending on a show cause notice which has yet to be adjudicated. This is erroneous as value proposed in SCN dated 08.09.2021 the first S.C.N cannot be made basis to raise and confirm the demand in the present case without adjudication. Thus, entire demand confirmed in the present case vide impugned show cause notices on the basis of alleged value proposed in another show cause notice dated 08.09.2021, is bad in law. It is nothing but putting the cart before the horse. Perhaps it is a fit case, where common adjudicating authority for two jurisdictions should have been appointed by the C.B.I.C. An allegation which is yet to be decided in a show cause notice cannot be made evidentiary basis to sustain demand in another. A weak foundation of allegation alone in one matter cannot lead to strong edifice of sustainable evidence in another matter. “Debile fundamentum fallit opus” applies in the present case. An allegation which has not faced judicial scrutiny does not merit to be treated as authoritative evidence. We therefore, find that order cannot be sustained, same is set aside. Matter is remanded to be heard along with or after decision in show cause notice dated 08.09.2021 i.e. first S.C.N acquires sufficient evidentiary value and after due observance of natural justice in the impugned S.C.Ns and providing various relied upon materials to the appellant and after considering on submissions including made on the point of limitation vis-a-vis of corrigendum by the appellant. Impugned order is set aside and appeals are allowed by way of remand in above terms. Appeals allowed by remand.
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