Customs valuation by comparable imports required merits review; appellate authority could not treat the basis as wholly new.

Valuation under customs law was disputed on the basis of comparable imports, and the assessee had already addressed that valuation approach in reply to the show cause notice. The appellate authority was therefore not justified in treating the adjudication as resting on wholly new and undisclosed grounds introduced for the first time in the order. The correct valuation methodology had to be examined on merits by the Commissioner (Appeals), and the matter was remanded for fresh decision on that basis.

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Issues: Whether the order of the Commissioner (Appeals) could be set aside on the ground that the adjudicating authority had proceeded on new and undisclosed grounds, and whether the matter required fresh consideration on merits.

Analysis: The show cause notice had proposed valuation on the basis of comparable imports, and the assessee had responded to that basis in its reply. The appellate authority was therefore not justified in treating the adjudication as one founded on wholly new grounds introduced for the first time in the order. The dispute as to the correct valuation methodology had to be examined on merits by the Commissioner (Appeals).

Conclusion: The order under challenge was set aside and the matter was remanded to the Commissioner (Appeals) for fresh decision on merits.

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