TaxTMI 
TaxTMI 
2025 (1) TMI 438
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....Complex, Chennai. The appellant submitted that the Special Valuation Branch (SVB), of the Custom House, has issued an Investigation Report (IR) No. 11/2023 dated 14.2.2023 regarding the related party imports made by them. The appellant was apprehensive about the outcome of the IR on the quantum of duty liability, not only for the bills of entry already provisionally assessed but also for the bills of entry to be filed on day-to-day basis. They hence requested SVB to re-examine the IR. On 23.10.2023 a letter was issued by the Additional Commissioner, SVB, to them, stating that there is no provision for re-examination of the IR. Aggrieved by the said letter they filed an appeal before the Commissioner (Appeals). The said Authority held that the IR is not an appealable order as per the Customs Act and rejected their appeal. Hence this appeal. 3. The Ld. Counsel Shri M. Manickam appeared for the appellant and Ld. Special Counsel Shri S. Subramaniam appeared for the respondent. 3.1 The Ld. Counsel for the appellant traced the history of related party valuation done by Customs in their case. He stated that SVB had carried out extensive investigation and passed an Order-in-Original ....
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....y vested in the IR approved by the Principal Commissioner transcends the jurisdiction of the Commissioner of Customs (Appeals). Following the completion of the investigation, the IR is forwarded to the Assessment Group/Adjudicating Authority. This body is responsible for meticulously examining the Investigation report's findings and determining any conceivable impact on the declared transaction value. They undertake this task through the issuance of a Show Cause Notice followed by an Adjudication Order. Importantly, the Adjudication Order represents a conclusive decision and is subject to appeal. Hence, I find that the present IR is not appealable order before the Commissioner of Customs (Appeals). 39. From the above findings, I reject the appeal filed by the appellant." (emphasis added) The Ld. Counsel stated that aggrieved by the rejection they filed the present appeal on the following grounds. 1) The letter dated 23.10.2023 and IR dated 14.02.2023 of the Additional Commissioner had communicated the 'decision' of the Principal Commissioner of Customs 2) The 1st and 2 nd renewal of the SVB order was done in terms of Circular No. 11/2001-Cu....
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....citly mandates that "in so far as the procedure for completing pending SVB investigations, instructions contained in circular no. 5/2016 dated 9th February 2016 shall be followed." The intent behind the 2016 reforms was to create a uniform, efficient system for handling all SVB cases. Therefore, Ground No. 2 of the appeal deserves rejection. The appellant's third contention holding letter dated SVB, as an appealable "decision" under Section 128 of the Customs Act is legally untenable. The IR is essentially a fact-finding document that forms the foundation for subsequent adjudication proceedings. It does not, by its very nature and purpose, create any immediate legal rights or obligations that could be subject to appeal. The appellant's argument regarding violation of natural justice principles is particularly unfounded given the extensive opportunities provided throughout the investigation process. The Constitutional arguments invoking Article 19(1)(g) and Article 265 are premature and misconceived. Constitutional remedies remain available against actual assessment orders, not against fact-finding reports. The appellant's right to carry on business remains unaffected by....
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....es multiple safeguards for the appellant's interests while fulfilling necessary regulatory functions. Therefore, this ground of appeal merits decisive rejection. The Ld. Special Counsel Shri S. Subramaniam prayed that: (1) The appeal may be dismissed as not maintainable; (2) The appellant may be directed to pursue appropriate remedies in assessment proceedings. 4. We have heard the absorbing and spirited submissions made by the rival parties and have gone through the appeal memorandum along with voluminous documents and the judgments cited. Though both the parties have addressed us at length on various matters, we do not find it necessary to go into all those issues as some are extraneous to the dispute regarding the maintainability of an appeal before the Commissioner (Appeal) against a letter received from the department enclosing SVB's Investigation Report. 5. The power of the Government to issue instructions has been recognised by a Constitution Bench of the Hon'ble Supreme court in Sant Ram Vs State of Rajasthan, [AIR 1967 SC1910]. The Hon'ble Court held that while statutory rules cannot be amended by Executive instructions but "if the rules are sil....
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....and not on behalf of someone else. A Constitution Bench judgment of the Hon'ble Supreme Court, consisting of 5 judges, in the case of Adi Pherozshah Gandhi Vs H.M Seervai, Advocate General of Maharashtra [(1970) 2 SCC 484 / AIR 1971 SUPREME COURT 385], while examining the term 'person aggrieved' held that; "Generally speaking, a person can be said to be aggrieved by an order which is to his detriment, pecuniary or otherwise or causes him some prejudice in some form or other. A person who is not a party to a litigation has no right to appeal merely because the judgment or order contains some adverse remarks against him. . . . . We find ourselves unable to take the view that because a person has been given notice of some proceedings wherein he is given a right to appear and make his submissions, he should without more have a right of appeal from an order rejecting his contentions or submissions. An appeal is a creature of statute and if a statute expressly gives a person a right to appeal, the matter rests there." Again in Northern Plastics Ltd. v. Hindustan Photo Films Mfg. Co. Ltd. [1997 (91) E.L.T 502 (S.C)], the Apex Court stated; Innumerable statutes both in....
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....administrative circular that is issued by SEBI under Section 11(1) of the Securities Exchange Board of India Act, 1992, can be the subject matter of appeal under Section 15T of the said Act. The Hon'ble Court held; 12. This celebrated passage has been referred to time and again in the Supreme Court's judgments. Thus in Province of Bombay v. Kushaldas S. Advani [1950) SCR 621], it was held : "(i) That, if a statute empowers an authority, not being a Court in the ordinary sense, to decide disputes arising out of a claim made by any party under the statute which claim is opposed by another party and to determine the respective rights of the contesting parties who are opposed to each other, there is a lis and prima facie, and in the absence of anything in the statute to the contrary it is the duty of the authority to act judicially and the decision of the authority is a quasi-judicial act; and (ii) that if a statutory authority has power to do any act which will prejudicially affect the subject, then, although there are not two parties apart from the authority and the contest is between the authority proposing to do the act and the subject opposing it, the fi....
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.... nature. It held; "Question whether a decision is judicial or is purely administrative, often arises when jurisdiction of the superior courts to issue writs of certiorari is invoked. Often the line of distinction between decisions judicial and administrative is thin : but the principles for ascertaining the true character of the decisions are well-settled. A judicial decision is not always the act of a judge or a tribunal invested with power to determine questions of law or fact : it must however be the act of a body or authority invested by law with authority to determine questions or disputes affecting the rights of citizens and under a duty to act judicially. A judicial decision always postulates the existence of a duty laid upon the authority to act judicially. Administrative authorities are often invested with authority or power to determine questions, which affect the rights of citizens. The authority may have to invite objections to the course of action proposed by him, he may be under a duty to hear the objectors, and his decision may seriously affect the rights of citizens but unless in arriving at his decision he is required to act judicially, his decision will b....
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....is that some real prejudice must have been caused to the complainant. The Court has shifted from its earlier concept that even a small violation shall result in the order being rendered a nullity. To the principal doctrine of audi alterem partem, a clear distinction has been laid down between the cases where there was no hearing at all and the cases where there was mere technical infringement of the principal. The Court applies the principles of natural justice having regard to the fact situation obtaining in each case. It is not applied in a vacuum without reference to the relevant facts and circumstances of the case. It is no unruly horse. It cannot be put in a straightjacket formula. [See Viveka Nand Sethi vs. Chairman, J. & K. Bank Ltd. & Ots. (2005) 5 SCC 337 and State of U.P. vs. Neeraj Awasthi & Ors. JT 2006 (1) SC 19. See also Mohd. Sartaj vs. State of U.P. (2006) 1 SCALE 265.] In Union of India & Anr. vs. Tulsi Ram Patel [(1985) Supp.2 SCR 131 : (1985) 3 SCC 398], whereupon again Mr. Rao placed strong reliance, this Court did not lay down a law in absolute terms that violation of principle of natural justice would be read into the equality clause contained in Article 14 of....
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....ion the Court or the Tribunal should make a distinction between a total violation of natural justice (rule of audi alteram partem) and violation of a facet of the said rule, as explained in the body of the judgment. In other words, a distinction must be made between "no opportunity" and no adequate opportunity, i.e., between "no notice"/"no hearing" and "no fair hearing". (a) In the case of former, the order passed would undoubtedly be invalid (one may call it 'void' or a nullity if one chooses to). In such cases, normally, liberty will be reserved for the Authority to take proceedings afresh according to law, i.e., in accordance with the said rule (audi alteram partem). (b) But, in the latter case, the effect of violation (of a facet of the rule of audi alteram partem) has to be examined from the standpoint of prejudice; in other words, what the Court or Tribunal has to see is whether in the totality of the circumstances, the delinquent officer/employee did or did not have a fair hearing and the orders to be made shall depend upon the answer to the said query." (emphasis added) We find that there was no statutory right for a hearing at the stage of preparation of IR and....