Customs valuation fails when undisclosed material is used; fresh adjudication required after breach of natural justice.

Customs valuation based on a DRI alert and market enquiry was found unsustainable where later-obtained documents, RTI material, a compact disc of price workings, and contemporaneous import data were not supplied to the importer or considered in the show cause notice. The omission was treated as a breach of natural justice because the materials were relevant to the valuation exercise and the record was not adequate for a final merits finding. The value enhancement and consequential demand were therefore set aside in their present form, and the matter was remanded for fresh adjudication on the additional materials.

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Issues: Whether the enhancement of imported goods' value, based on DRI alert, market enquiry and other materials, was sustainable when relevant documents obtained later were not supplied to the importer, and whether the matter required remand for reconsideration.

Analysis: The valuation dispute originated from an alert regarding possible under-valuation, but the record showed that the lower authorities relied on materials such as market enquiry and correspondence without considering documents subsequently obtained under RTI, the compact disc containing working of prices, and contemporary import data produced by the appellant. Those materials were treated as vital to the valuation exercise, yet they had not been put to the appellant in the show cause notice. In these circumstances, the adjudication suffered from violation of natural justice, and the record was insufficient for a final merits determination without fresh examination of the additional materials.

Conclusion: The value enhancement and consequential demand could not be sustained in the present form, and the matter was required to be remanded to the adjudicating authority for fresh consideration.

Ratio Decidendi: Where material documents relevant to customs valuation are not disclosed to the importer and the adjudication is completed without considering them, the order is vitiated by breach of natural justice and the matter may be remanded for de novo examination.

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