Natural justice in customs valuation requires disclosure of comparative import invoices and market enquiry material before rejecting declared value.

Rejection of declared customs value and enhancement under Rule 5 of the Customs (Valuation) Rules, 1988 must be supported by disclosure of the comparative invoices and market enquiry material relied upon. Where the assessee specifically requests those documents and they are not furnished, the valuation exercise breaches natural justice because the adverse comparison cannot be effectively tested. The valuation order and consequential duty demand were therefore set aside, and the matter was remanded for fresh adjudication after supply of the relevant documents and a reasonable opportunity of hearing.

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Issues: Whether the valuation order and consequential duty demand were liable to be set aside for non-supply of the invoices relied upon for comparison and the market enquiry report, resulting in breach of natural justice.

Analysis: The impugned valuation was based on rejection of the declared value and enhancement under Rule 5 of the Customs (Valuation) Rules, 1988, using comparative imports and a market enquiry. The appellants had specifically sought the invoices relating to the relied-upon Chennai imports and the market enquiry report, but these materials were not furnished. Since these documents formed part of the basis for rejecting the declared value and confirming the demand, fair opportunity required their disclosure before adverse findings were returned.

Conclusion: The impugned order was set aside and the matter was remanded for fresh adjudication after supplying the relevant documents and granting a reasonable opportunity of hearing.

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