Court sets aside order, emphasizes Rule 12 compliance for valuation issues, rejects alternate remedies argument.

The court allowed the petition, setting aside the impugned order and remanding the matter for a fresh decision. The court emphasized the importance of complying with Rule 12 of the Customs Valuation Rules, requiring proper communication of grounds for doubting declared value and providing a reasonable opportunity to be heard. The court rejected the argument of the availability of alternate remedies, stating that breach of natural justice warrants intervention under Article 226. The case was assigned to a different officer for reconsideration, with instructions to follow due process.

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Issues Involved
1. Violation of principles of natural justice.
2. Non-compliance with Rule 12 of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007.
3. Rejection of declared value of imported goods.
4. Availability and adequacy of alternate remedies.

Detailed Analysis

1. Violation of Principles of Natural Justice:
The primary issue raised by the Petitioners is that the impugned order by the Deputy Commissioner of Customs was passed in violation of the principles of natural justice. The Petitioners argued that the mandatory requirement of disclosing the grounds for doubting the declared value was not fulfilled. The court noted that merely holding a personal hearing does not comply with Rule 12, which mandates that the importer must be informed in writing of the grounds for doubting the declared value and be given a reasonable opportunity to be heard.

2. Non-compliance with Rule 12 of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007:
The court examined Rule 12, which provides the procedure for rejecting the declared value of imported goods. Under sub-rule (1), the proper officer must ask the importer for further information if there is a reason to doubt the declared value. Sub-rule (2) requires the proper officer to intimate the importer in writing about the grounds for doubting the declared value and provide a reasonable opportunity of being heard. The court found that the proper officer failed to comply with these requirements, as the grounds for doubting the declared value were not communicated to the importer, thus breaching the principles of natural justice.

3. Rejection of Declared Value of Imported Goods:
The impugned order rejected the transaction value declared by the Petitioners and adjusted the value of the imported goods. The court highlighted that Rule 12 does not provide a method for determining value but offers a mechanism for rejecting the declared value if there is reasonable doubt. If the declared value is rejected, the value must be determined sequentially according to rules 4 to 9. The court emphasized that the proper officer must follow the procedure laid down in Rule 12 before rejecting the declared value.

4. Availability and Adequacy of Alternate Remedies:
The Respondents argued that the impugned order is subject to an appeal before the Commissioner of Customs and that a petition under Article 226 of the Constitution should not be entertained. However, the court held that the existence of an alternate remedy does not bar the maintainability of a petition under Article 226 in cases of breach of natural justice. The court noted that the Deputy Commissioner of Customs demonstrated a closed mind and treated compliance with natural justice as a mere formality, as evidenced by the statement in the affidavit in reply. Therefore, the court decided to set aside the impugned order and remand the matter for fresh decision-making, assigning the case to a different officer.

Conclusion
The court allowed the petition, setting aside the impugned order dated 19 March 2013. The court directed that the proceedings be remanded back for a fresh decision, with the proper officer required to follow the procedure under Rule 12 by furnishing the grounds for doubting the declared value to the Petitioners. The Petitioners should be given a reasonable opportunity to submit objections. The Commissioner of Customs was instructed to assign the hearing to a different officer. The rule was made absolute with no order as to costs.

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