2011 (6) TMI 704 - HC - Customs

Appeal Allowed, Matter Remitted for Reasoned Decision

The Civil Miscellaneous Appeal was allowed, setting aside the previous order and remitting the matter to CESTAT for a reasoned decision within a specified ... Requirement to record reasons - Quasi judicial duty to give reasons - Non speaking order - Remand for fresh consideration - Verification of relatedness under Rule 2(2)(iv) of the Customs Valuation Rules, 1988 - Statutory appeal to CESTAT as last fact finding forumNon speaking order - Requirement to record reasons - Quasi judicial duty to give reasons - Statutory appeal to CESTAT as last fact finding forum - Validity of the CESTAT order which dismissed the departmental appeal by a brief non speaking order - HELD THAT: - The CESTAT was exercising jurisdiction in a statutory second appeal and, as the last forum on facts, was required to consider the factual matrix objectively and record reasons for its conclusion. The impugned order rejected the appeal solely on the ground that no additional points were raised before the Tribunal and contained no discussion of the material facts or reasons supporting the conclusion. Reliance on precedents emphasising that quasi judicial and administrative decisions affecting rights must speak was accepted. Given the nature of the lis between the Department and the importer and the availability of challenge under Section 130 of the Customs Act, an order devoid of reasons is unsatisfactory and cannot stand. [Paras 7, 8, 11]The CESTAT's non speaking order is not justified and must be set aside for want of reasons.Remand for fresh consideration - Verification of relatedness under Rule 2(2)(iv) of the Customs Valuation Rules, 1988 - Disposition of the matter following setting aside of the CESTAT order - HELD THAT: - The matter, which concerns the question whether the importer and foreign supplier were related within the meaning of Rule 2(2)(iv) of the Customs Valuation Rules, 1988 and the related adjustment to transaction value, was not adjudicated by this Court on merits. In view of the absence of reasons in the CESTAT order, the appropriate course is to remit the matter to the CESTAT for fresh consideration on merits and in accordance with law. The CESTAT is directed to decide the appeal afresh expeditiously and within a specified timeframe. [Paras 12]Order dated 28 10 2009 is set aside and the matter is remitted to the CESTAT to decide the issues, including verification of relatedness under Rule 2(2)(iv), on merits within three months.Final Conclusion: The CESTAT's non speaking order is set aside; the appeal is remitted to the CESTAT for fresh, reasoned consideration of the factual and legal issues (including relatedness under Rule 2(2)(iv) of the Customs Valuation Rules, 1988) and to be decided on merits within three months. Civil Miscellaneous Appeal allowed; no costs. Issues:Verification of relationship influence on transaction value of imported goods; Validity of order by statutory authority; Adequacy of reasoning in CESTAT's decision.Analysis:The judgment involves a Civil Miscellaneous Appeal challenging a non-speaking order by the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) related to the influence of relationship between an importer and a supplier on the transaction value of imported goods. The department had found the importer and supplier related under Customs Valuation Rules, 1988, based on the foreign supplier's share capital in an Indian company. The first appellate authority, however, held that the relationship was not proven as per Rule 2(2)(iv)(c) of the Rules, and allowed the appeal. The Customs Department then appealed to CESTAT, which dismissed the appeal without providing reasons. The appellant contended that CESTAT's decision lacked objectivity, citing a Supreme Court judgment emphasizing the need for reasoned decisions in such matters.The respondent argued that no new material was presented to warrant a different finding from the first appellate authority. The High Court noted that CESTAT's non-speaking order was unjustified in a statutory appeal involving the Department and an importer. Referring to Supreme Court precedents, the High Court emphasized the importance of recording reasons in decisions affecting parties, ensuring justice is not only done but also appears to be done. The lack of reasons in CESTAT's decision led the High Court to set aside the order and remit the matter for fresh consideration, directing CESTAT to decide expeditiously and within three months.In conclusion, the Civil Miscellaneous Appeal was allowed, setting aside the previous order and remitting the matter to CESTAT for a reasoned decision within a specified timeframe. The judgment underscores the necessity of providing justifiable reasons in decisions affecting parties, in line with principles of justice, accountability, and transparency in the legal system.