Appellate authority cannot decide valuation on unraised grounds; impugned customs order set aside and remanded.

An appellate authority must confine itself to the issue actually raised in appeal and cannot direct valuation on a basis not pleaded before it. Here, the Commissioner (Appeals) exceeded the scope of the Revenue's objection by ordering determination of assessable value under Rules 7 and 8 of the Customs Valuation Rules, 2007, although that issue had not been prayed for. The impugned order was set aside and the matter remanded to the Commissioner (Appeals) to decide the issue raised by the Revenue after granting the appellant a reasonable opportunity of hearing, with all issues kept open.

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Issues: Whether the Commissioner (Appeals) was justified in remanding the matter for determination of assessable value under Rules 7 and 8 of the Customs Valuation Rules, 2007, when that issue was neither raised nor prayed for before him, and whether the impugned order required interference.

Analysis: The dispute before the appellate authority centred on the Revenue's objection that the importer, being a related person of the foreign supplier, had received an unjustified extra discount and that the adjudicating authority's acceptance of transaction value was incorrect. Instead of confining the determination to the issue raised, the Commissioner (Appeals) travelled beyond the pleadings and directed valuation under Rules 7 and 8 of the Customs Valuation Rules, 2007. Such a course was not justified, as an appellate authority must decide the controversy placed before it and cannot rest its order on an unagitated basis.

Conclusion: The impugned order was set aside and the matter was remanded to the Commissioner (Appeals) to decide the issue raised by the Revenue after giving the appellant a reasonable opportunity of hearing. All issues were kept open.

Ratio Decidendi: An appellate authority must adjudicate only the issue agitated before it and cannot base its decision on grounds not raised in appeal.

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