Natural justice in customs valuation requires clear jurisdiction and consideration of evidence before finalising assessment

Customs valuation adjudication must be conducted by the authority clearly exercising jurisdiction, and an order is unsustainable where proceedings are left ambiguous between officers. Here, the matter also failed because extensive documentary evidence supporting the declared transaction value was not considered, rendering the order non-speaking and contrary to natural justice. The assessment and penalty order was therefore set aside and the matter remanded for de novo adjudication, with protection against encashment of the bank guarantee until disposal.

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Issues: (i) Whether the impugned assessment order could be sustained where the Commissioner proceeded with finalisation while the matter was also under scrutiny by the Assistant Commissioner; (ii) Whether the order was vitiated for non-consideration of the voluminous evidence produced by the appellant and required remand for de novo consideration.

Issue (i): Whether the impugned assessment order could be sustained where the Commissioner proceeded with finalisation while the matter was also under scrutiny by the Assistant Commissioner.

Analysis: The Commissioner did not ly indicate that he had taken over the proceedings from the Assistant Commissioner for finalisation of the Bills of Entry. The record showed that the Assistant Commissioner was still calling for evidence and was seized of the matter. In such circumstances, clarity as to the forum exercising jurisdiction was necessary.

Conclusion: The order was not sustained on this aspect and the matter required reconsideration.

Issue (ii): Whether the order was vitiated for non-consideration of the voluminous evidence produced by the appellant and required remand for de novo consideration.

Analysis: The valuation was determined by reliance on an earlier decision in a similar matter, but the appellant had produced extensive documentary evidence to support acceptance of the declared transaction value. That material had not been considered. The omission amounted to violation of the principles of natural justice and the order was held not to be a speaking order.

Conclusion: The impugned order was set aside and the matter was remanded for de novo consideration in accordance with the principles of natural justice.

Final Conclusion: The assessment and penalty order did not survive and the matter was sent back for fresh adjudication with protection against encashment of the bank guarantee until disposal.

Ratio Decidendi: An adjudication order affecting customs valuation must be set aside where the material evidence is not considered and the proceeding lacks clarity on the authority exercising jurisdiction, as this violates natural justice and warrants de novo adjudication.

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