{"id":22542,"date":"2021-03-27T12:32:59","date_gmt":"2021-03-27T07:02:59","guid":{"rendered":"https:\/\/itatonline.org\/archives\/?p=22542"},"modified":"2021-03-27T12:32:59","modified_gmt":"2021-03-27T07:02:59","slug":"syska-led-lights-pvt-ltd-vs-uoi-bombay-high-court-customs-act-it-is-a-settled-proposition-that-when-a-law-requires-a-thing-to-be-done-in-a-particular-manner-it-has-to-be-done-in-the-prescribed-manne","status":"publish","type":"post","link":"https:\/\/itatonline.org\/archives\/syska-led-lights-pvt-ltd-vs-uoi-bombay-high-court-customs-act-it-is-a-settled-proposition-that-when-a-law-requires-a-thing-to-be-done-in-a-particular-manner-it-has-to-be-done-in-the-prescribed-manne\/","title":{"rendered":"SYSKA LED Lights Pvt. Ltd vs. UOI (Bombay High Court)"},"content":{"rendered":"
\n

SYSKA LED Lights Pvt. Ltd. v. UOI &Ors WP(L) No. 3933 of 2020 dated March 25, 2021( Bom) (HC) <\/strong><\/p>\n

Customs Act , 1962<\/a>– S. 124 :  It is a settled proposition that when a law requires a thing to be done in a particular manner, it has to be done in the prescribed manner and proceeding in any other manner is necessarily forbidden- Order is set aside . <\/strong><\/p>\n

 <\/strong><\/p>\n

Facts: <\/strong>
\n By filing this petition under Article 226 of the Constitution ofIndia, petitioner seeks quashing of order dated 23.09.2020 passed by theJoint Commissioner of Customs\/Respondent No. 3 and further seeks a direction to the respondents to release theimported goods of the petitioner.<\/p>\n

Petitioner had imported smart. It is stated that the imported smart plugsare used for extension socket purposes and since the same does not generateany wi-fi or bluetooth signal, petitioner claims that no import licence fromthe Wireless Procurement Cell, Department of Information andTechnology, Government of India was required. Petitioner also got theproduct tested to certify that the technical features of the product did notfall under licensing requirement.<\/p>\n

The apprising officers raisedobjection regarding requirement of import licence with respect to theimported products.Thereafter office of respondent No.3 scheduled a personal hearing through videoconferencing which was attended by the authorised representative of thepetitioner. The authorised representative told respondent No.3 that all thethree declarations were already provided to the apprising officers andtherefore requested that the imported goods be released forthwith.However, no recording of personal hearing was communicated to thepetitioner.<\/p>\n

Thereafter respondent No.3 passed the impunged order inoriginal rejecting the unit price of the goods as declaredby the petitioner and directed that the same be redetermined. Accordingly,petitioner was directed to pay the resultant differential duty along withapplicable interest.<\/p>\n

Aggrieved by the order being in violation of principles of Natural Justice, the present Writ is filed.
\n Held<\/strong>:
\n No notice in writing under section124(a) of the Customs Act was given to the petitioner before passing theimpugned order in original which not only confiscated the goods but alsoimposed penalty on the petitioner.From a reading of the impugned order in original, it does notappear that the procedure laid down for rejection of declared value andredetermination of value was followed.<\/p>\n

It is a settled proposition that when a law requires a thing to bedone in a particular manner, it has to be done in the prescribed manner andproceeding in any other manner is necessarily forbidden.<\/p>\n

The impugned order in original is clearly unsustainablein law being in violation of the principles of natural justice as well as thestatutory provisions as alluded to hereinabove.<\/p>\n

Impugned Order set aside and direct that the proper officer may proceed with thematter afresh, if he is so inclined, by following the mandate of section 124of the Customs Act and Rule 12 of the Customs Valuation (Determinationof Value of Imported Goods) Rules, 2007.<\/p><\/blockquote>\n

IN THE HIGH COURT OF JUDICATURE AT BOMBAY
\nORDINARY ORIGINAL CIVIL JURISDICTION
\nWRIT PETITION (L) NO.3933 OF 2020
\nSYSKA LED Lights Pvt. Ltd. ..Petitioner
\nVersus
\nUnion of India & Ors. ..Respondents
\nMr. Prithviraj Choudhari i\/by Vaish Associates Advocates, for the
\nPetitioner.
\nMr. Pradeep S. Jetly, Senior Advocate a\/w Mr. J. B. Mishra, Advocate for
\nthe Respondents
\nCORAM : UJJAL BHUYAN &
\nMILIND N. JADHAV, JJ.
\nORDER RESERVED ON : 02.02.2021
\nORDER PRONOUNCED ON : 25.03.2021
\nP.C.
\nHeard Mr. Prithviraj Choudhari, learned counsel for the
\npetitioner and Mr. Pradeep S. Jetly, learned senior counsel for the
\nrespondents.
\n2. By filing this petition under Article 226 of the Constitution of
\nIndia, petitioner seeks quashing of order dated 23.09.2020 passed by the
\nJoint Commissioner of Customs, Gr. VA, Nhava Sheva-V i.e., respondent
\nNo.3 and further seeks a direction to the respondents to release the
\nimported goods of the petitioner covered by Bill of Entry No.8311310
\ndated 28.07.2020.
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\n3. Case of the petitioner is that it is a private limited company
\nregistered under the Companies Act, 1956 and primarily engaged in the
\nbusiness of import and manufacture of light products.
\n4. Petitioner had imported smart plugs vide Bill of Entry
\nNo.8311310 dated 28.07.2020. It is stated that the imported smart plugs
\nare used for extension socket purposes and since the same does not generate
\nany wi-fi or bluetooth signal, petitioner claims that no import licence from
\nthe Wireless Procurement Cell, Department of Information and
\nTechnology, Government of India was required. Petitioner also got the
\nproduct tested to certify that the technical features of the product did not
\nfall under licensing requirement.
\n5. Notwithstanding the above, the apprising officers raised
\nobjection regarding requirement of import licence with respect to the
\nimported products. Petitioner agreed for a first check examination of the
\nsame which was carried out in the presence of the authorised representative
\nof the petitioner. During the said examination neither any objection was
\nraised nor any inconsistency was found. Despite the above, at the
\ninsistance of officers serving in the office of Joint Commissioner of
\nCustoms, Nhava Sheva-V i.e. respondent No.3, petitioner furnished three
\ndeclarations dated 02.09.2020 certifying the truth and veracity of all the
\ndeclarations. Thereafter office of respondent No.3 vide letter dated
\n14.09.2020 scheduled a personal hearing on 18.09.2020 through video
\nconferencing which was attended by the authorised representative of the
\npetitioner. The authorised representative told respondent No.3 that all the
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\nthree declarations were already provided to the apprising officers and
\ntherefore requested that the imported goods be released forthwith.
\nHowever, no recording of personal hearing was communicated to the
\npetitioner.
\n6. Thereafter respondent No.3 passed the impunged order in
\noriginal dated 23.09.2020 rejecting the unit price of the goods as declared
\nby the petitioner and directed that the same be redetermined at USD
\n13.66097 (C\/F value) and USD 22.02365 (C\/F value). Accordingly,
\npetitioner was directed to pay the resultant differential duty along with
\napplicable interest under section 28AA of the Customs Act, 1962 (briefly
\n\u201cthe Customs Act\u201d hereinafter). As a consequence, respondent No.3
\nconfiscated the imported goods under section 111(m) of the Customs Act
\nbut gave an option to the petitioner to redeem the confiscated goods upon
\npayment of redemption fine of Rs.4,00,000.00 under section 125 of the
\nCustoms Act, further imposing penalty of Rs.1,90,000.00 under section
\n112(a) of the Customs Act.
\n7. Aggrieved by the aforesaid order in original dated 23.09.2020
\nand assailing the same primarily on the ground that it was passed in gross
\nviolation of the principles of natural justice, the present writ petition came
\nto be filed.
\n8. By order dated 06.10.2020, this Court had issued notice. On
\nthe next date i.e. on 29.10.2020, liberty was granted to the petitioner to
\namend the prayer portion of the writ petition and also to file interim
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\napplication for release of the imported goods.
\n9. Thereafter petitioner had carried out the amendments in the
\nwrit petition including amendment in the prayer portion which reads as
\nunder :-
\n\u201ciii. direct the Respondents itself, its officers, subordinates,
\nservants and agents to release the goods imported vide Bill of
\nEntry No.8311310 dated 28.07.2020 subject to the
\nApplicant furnishing a Bank Guarantee of the amount of
\nCustoms Duty declared in the said Bill of Entry No.8311310
\ndated 28.07.2020 and the redemption fine and penalty
\nimposed under impugned order dated 23.09.2020 passed by
\nRespondent No.3.\u201d
\n10. On 03.11.2020 this Court after hearing learned counsel for the
\nparties took the view that it would be in the interest of justice if interim
\nrelief was granted to the petitioner making it clear that such relief would be
\nsubject to outcome of the writ petition. Accordingly, interim relief in terms
\nof prayer clause 23(c)(iii) which has been extracted above was granted.
\n11. Respondents have filed reply affidavit through Shri. Rajesh
\nKumar Mishra, Commissioner of Customs, Nhava Sheva-V, Jawaharlal
\nNehru Customs House, Nhava Sheva. At the outset, a preliminary
\nobjection has been raised that against the impugned order in original there
\nis a statutory remedy of appeal as provided under section 128 of the
\nCustoms Act before the Commissioner (Appeals). Therefore, the writ
\npetition should be dismissed on the ground of petitioner not availing the
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\nalternative remedy as provided under the statute. The allegation that there
\nhas been gross violation of the principles of natural justice has been denied.
\nIt is stated that initially a query was raised by the office of respondent No.3
\non 30.07.2020 and in response thereto petitioner submitted a declaration
\n(dated \u2018nil\u2019) that the imported product was smart plug used for extension
\nsocket purpose. It was stated that as the product did not generate
\nbluetooth\/wi-fi signals, no import licence from the Wireless Procurement
\nCell was necessary. Customs department was not satisfied with the above
\nsubmission. This led to petitioner asking for first check vide letter dated
\n03.08.2020. Accordingly, the Bill of Entry was examined on first check
\nbasis on 03.08.2020 following which a query was again raised on
\n05.08.2020 for submission of representative sealed sample.
\n11.1. On verification of the representative sealed sample, it was
\nobserved that the imported goods attracted Equipment Type Approval
\n(ETA) compliance and that declared value of the goods also appeared to be
\nlow. This was orally informed to the petitioner. In response thereto,
\npetitioner made declaration dated 02.09.2020 stating that the imported
\nproducts exclusively operate in license bands and comply with the technical
\nparameters. Price mentioned was fair and correct. On the basis of the
\naforesaid submission, the importer (petitioner) requested respondent No.3
\nto consider its prayer and to clear the goods. However, respondent No.3
\nwas not satisfied with the submission of the petitioner with regard to
\nvaluation of the goods and accordingly a personal hearing was given vide
\nletter dated 16.09.2020.
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\n11.2. Importer (petitioner) was also informed about compliance of
\nEquipment Type Approval (ETA) and requirement of licence from the
\nWireless Procurement Cell, in response to which petitioner initially misled
\nthe customs department by writing that Equipment Type Approval (ETA)\/
\nlicence from Wireless Procurement Cell is not applicable for the goods.
\nAfter examining the representative sealed sample, petitioner was informed
\nthat the declared value of the goods was low. Therefore, it is quite clear that
\npetitioner was well informed of the allegations prior to passing of the
\nimpugned order in original dated 23.09.2020.
\n11.3. It is stated that petitioner was given due opportunity of
\npersonal hearing and based on its submission and request the impugned
\norder in original was passed. In the facts and circumstances of the case, it
\ncannot be said that there was violation of the principles of natural justice,
\nthus leading to infringement of Article 14 of the Constitution of India.
\nImpugned order in original is a well reasoned one and was passed by
\nrespondent No.3 within jurisdiction. In the circumstances, respondents
\nseek dismissal of the writ petition.
\n12. Learned counsel for the petitioner has referred to paragraphs
\n10, 11 and 12 of the writ petition as well as to the impugned order in
\noriginal dated 23.09.2020 and submits that the same was passed in
\nviolation of section 124 of the Customs Act inasmuch as no show-cause
\nnotice was issued to the petitioner before the order of confiscation was
\npassed by way of the impugned order in original. He has also referred to
\nRule 12 of the Customs Valuation (Determination of Value of Imported
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\nGoods) Rules, 2007 to contend that in the event of any dispute as to the
\nvalue of imported goods as declared the proper officer has to intimate the
\nimporter in writing about the grounds for doubting the truth or accuracy of
\nthe value and provide a reasonable opportunity of being heard before
\ntaking a final decision. In the instant case neither any show-cause notice
\nwas issued nor any intimation was given to the petitioner in writing about
\nthe grounds for doubting the truth or accuracy of the declared value of the
\nimported goods. No reasonable opportunity of being heard was provided to
\nthe petitioner before passing the impugned order in original dated
\n23.09.2020. Learned counsel for the petitioner has submitted a
\ncompilation of documents and case laws. Particularly reliance has been
\nplaced on the decision of this Court in Forbo Siegling Movement Systems
\nIndia Pvt. Ltd. Vs. Union of Inida, 2013(296) E.L.T. 443. He therefore
\nsubmits that when there is violation of the principles of natural justice writ
\njurisdiction is available to the affected party who cannot be relegated to the
\nappellate forum.
\n13. On the other hand, Mr. Pradeep S. Jetly has referred to the
\nreliefs sought for by the petitioner. In so far challenge to the impugned
\norder in original dated 23.09.2020 is concerned, he submits that the said
\norder is clearly an appealable order. Under section 128 of the Customs Act
\nappeal against the said order in original would lie before the Commissioner
\nof Customs (Appeals). In such circumstances he submits that this Court
\nmay not entertain the writ petition and instead relegate the petitioner to the
\nforum of appeal.
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\n14. Submissions made by learned counsel for the parties have
\nreceived the due consideration of the Court.
\n15. Basic grievance of the petitioner is to the impugned order in
\noriginal dated 23.09.2020 passed by respondent No.3. However, as per
\norder of this Court dated 03.11.2020 the imported goods have been
\nreleased on petitioner furnishing bank guarantee for the amount of customs
\nduty declared in the Bill of Entry No.8311310 dated 28.07.2020 as well as
\ncovering the redemption fine and penalty imposed vide the impugned
\norder in original dated 23.09.2020.
\n16. From a perusal of the impugned order in original, it is seen
\nthat petitioner filed Bill of Entry No.8311310 dated 28.07.2020 for the
\nimported goods declaring two varieties of smart plug having unit price of
\nUSD 4.13 and 5.036 respectively. The declared total assessable value was
\nRs.63,13,410.40 and the duty thereon was Rs.19,55,895.00. The
\nimpugned order in original records that a personal hearing was held on
\n18.09.2020 through the mode of video conferencing which was attended
\nby the authorized representative of the petitioner Shri. Ganesh Kumar.
\nRespondent No.3 took the view that the imported goods were under valued
\nand that it was required to be redetermined under the Customs Valuation
\n(Determination of Value of Imported Goods) Rules, 2007. Upon redetermination,
\nhe held that the value of the two varieties of the imported
\ngoods would be USD 13.66097 and USD 22.02365. Thus he opined that
\nthe importer (petitioner) attempted to clear goods by submitting false
\ndeclarations and under valueing the goods rendering the goods liable for
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\nconfiscation under section 111(m) of the Customs Act besides being liable
\nfor penalty under section 112(a) of the Customs Act. Thereafter the
\nfollowing order was passed :-
\n\u201c14. I reject the unit price of the goods declared as –
\n\u2018SYSKA-MWP-002-BPLEDSL24W(Smart Plug) at USD
\n4.13 (FOB value) and \u2018SYSKA-MWP-003-
\nBPLEDSL24W(Smart Plug)\u2019 at USD 5.036 (FOB value) by
\nthe importer. I order the same to be re-determined as USD
\n13.66097(CIF value) and USD 22.02365(CIF value)
\nrespectively (as detailed in the Table A). I order the importer
\nto pay resulting differential duty thereon along with
\napplicable interest under Section 28AA of the Customs Act,
\n1962. The bill of entry may be assessed accordingly.
\n15. I confiscate the goods imported vide subject bill
\nof entry No.8311310 dated 28.07.2020 under Section
\n111(m) of the Custom Act, 1962. However, I given an
\noption to redeem the same upon payment of redemption fine
\nof Rs.4,00,000\/- (Rupees Four Lacs only) under Section 125
\nof the Custom Act, 1962.
\n16. I impose a penalty of Rs.1,90,000\/- (Rupees one
\nLac Ninety Thousand only) under Section 112(a) of the
\nCustoms Act, 1962 on the importer M\/s. Syska LED Lights
\nPvt. Ltd. for their said acts of omission and commissioner.
\n17. This order is issued without prejudice to any
\nother action that may be initiated against the above
\nmentioned notice\/firm or any other person under the
\nprovisions of the Customs Act, 1962 or any other law for the
\ntime being in force in India.\u201d
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\n17. Though the goods were confiscated, option was given to the
\npetitioner to redeem the same on the payment of redemption fine, besides
\nimposing penalty.
\n18. Confiscation of goods is dealt with in section 111 of the
\nCustoms Act. However, section 124 of the Customs Act provides for issue
\nof show-cause notice before confiscation of goods, etc.. Section 124 of the
\nCustoms Act reads as under :-
\n\u201cSECTION 124. Issue of show cause notice before
\nconfiscation of goods, etc.-
\nNo order confiscating any goods or imposing any penalty on
\nany person shall be made under this Chapter unless the
\nowner of the goods or such person –
\n(a) is given a notice in writing with the proper
\napproval of the officer of Customs not below the
\nrank of an Assistant Commissioner of Customs,
\ninforming him of the grounds on which it is
\nproposed to confiscate the goods or to impose a
\npenalty;
\n(b) is given an opportunity of making a
\nrepresentation in writing within such reasonable
\ntime as may be specified in the notice against the
\ngrounds of confiscation or imposition of penalty
\nmentioned therein; and
\n(c) is given a reasonable opportunity of being
\nheard in the matter:
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\nProvided that the notice referred in clause (a) and the
\nrepresentation referred to in clause (b) may, at the request of
\nthe person concerned be oral:
\nProvided further that notwithstanding issue of notice under
\nthis section, the proper officer may issue a supplementary
\nnotice under such circumstances and in such manner as may
\nbe prescribed.\u201d
\n19. From the above, it is quite evident that mandate of section 124
\nis that no order confiscating any goods or imposing any penalty on any
\nperson shall be made unless the owner of the goods or such person is given
\na notice in writing informing him of the grounds on which it is proposed to
\nconfiscate the goods or to impose the penalty and further the owner of the
\ngoods or such person must be given an opportunity of making a
\nrepresentation in writing within such reasonable time as may be stated in
\nthe notice against the grounds of confiscation or imposition of penalty and
\nfinally the owner of the goods or such person is given a reasonable
\nopportunity of being heard in the matter. Thus three conditions are
\nrequired to be fulfilled before an order of confiscation is passed or penalty is
\nimposed. Firstly, the person concerned shall be given a notice in writing
\ninforming him of the grounds on which the goods are proposed to be
\nconfiscated or penalty is proposed to be imposed. Secondly, such person has
\nto be given an opportunity of making a written representation within
\nreasonable time against the grounds of proposed confiscation or imposition
\nof penalty. Lastly, such a person must be given a reasonable opportunity of
\nbeing heard. However, as per the first proviso, such a notice and
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\nrepresentation may be given orally at the request of the person concerned.
\n20. Admittedly in this case, no notice in writing under section
\n124(a) of the Customs Act was given to the petitioner before passing the
\nimpugned order in original which not only confiscated the goods but also
\nimposed penalty on the petitioner. All that the impugned order in original
\nsays is that a personal hearing was given to the authorized representative of
\nthe petitioner on 18.09.2020 through video conferencing. There is
\nnothing on record to show or indicate that a request was made on behalf of
\nthe petitioner for oral notice or oral representation.
\n21. We may also refer to Rule 12 of the Customs Valuation
\n(Determination of Value of Imported Goods) Rules, 2007. Rule 12 reads
\nthus :-
\n\u201c12. Rejection of declared value. –
\n(1) When the proper officer has reason to doubt the truth
\nor accuracy of the value declared in relation to any imported
\ngoods, he may ask the importer of such goods to furnish
\nfurther information including documents or other evidence
\nand if, after receiving such further information, or in the
\nabsence of a response of such importer, the proper officer still
\nhas reasonable doubt about the truth or accuracy of the value
\nso declared, it shall be deemed that the transaction value of
\nsuch imported goods cannot be determined under the
\nprovisions of sub-rule (1) of rule 3.
\n(2) At the request of an importer, the proper officer, shall
\nintimate the importer in writing the grounds for doubting
\nthe truth or accuracy of the value declared in relation to
\ngoods imported by such importer and provide a reasonable
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\nopportunity of being heard, before taking a final decision
\nunder sub-rule (1).
\nExplanation.-
\n(1) For the removal of doubts, it is hereby declared that :-
\n(i) This rule by itself does not provide a
\nmethod for determination of value, it provides a
\nmechanism and procedure for rejection of declared
\nvalue in cases where there is reasonable doubt that
\nthe declared value does not represent the
\ntransaction value; where the declared value is
\nrejected, the value shall be determined by
\nproceeding sequentially in accordance with rules 4
\nto 9.
\n(ii) The declared value shall be accepted where
\nthe proper officer is satisfied about the truth and
\naccuracy of the declared value after the said
\nenquiry in consultation with the importers.
\n(iii) The proper officer shall have the powers to
\nraise doubts on the truth or accuracy of the
\ndeclared value based on certain reasons which may
\ninclude –
\n(a) the significantly higher value at which
\nidentical or similar goods imported at or
\nabout the same time in comparable quantities
\nin a comparable commercial transaction were
\nassessed;
\n(b) the sale involves an abnormal discount or
\nabnormal reduction from the ordinary
\ncompetitive price;
\n(c) the sale involves special discounts limited to
\nexclusive agents;
\n(d) the misdeclaration of goods in parameters
\nsuch as description, quality, quantity, country
\nof origin, year of manufacture or production;
\n(e) the non declaration of parameters such as
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\nbrand, grade, specifications that have
\nrelevance to value;
\n(f) the fraudulent or manipulated documents.\u201d
\n22. A careful perusal of Rule 12 as extracted above would go to
\nshow that if the proper officer has reason to doubt the truth or accuracy of
\nthe value declared in relation to any imported goods, he may ask the
\nimporter of such goods to furnish further information and at the request of
\nthe importer shall intimate the importer in writing the grounds for
\ndoubting the truth or accuracy of the value declared in relation to imported
\ngoods and provide a reasonable opportunity of being heard, before taking a
\nfinal decision.
\n23. From a reading of the impugned order in original, it does not
\nappear that the procedure laid down for rejection of declared value and
\nredetermination of value was followed.
\n24. It is a settled proposition that when a law requires a thing to be
\ndone in a particular manner, it has to be done in the prescribed manner and
\nproceeding in any other manner is necessarily forbidden.
\n25. Thus, from the above, it is quite evident that the impugned
\norder in original stands vitiated due to statutory infraction as above leading
\nto violation of the principles of natural justice thereby vitiating the
\nimpugned order-in-original.
\n26. On the submission of Mr. Pradeep S. Jetly, learned senior
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\ncounsel for the respondents as to availability of alternative remedy, we may
\nrefer to the decision of this Court in Forbo Siegling Movement Systems
\nIndia Pvt. Ltd. (supra). That was also a case where challenge was made to an
\norder passed by the Deputy Commissioner of Customs assessing the bills of
\nentry under Rule 9 of the Customs Valuation (Determination of Value of
\nImported Goods) Rules, 2007 read with section 14 of the Customs Act
\nafter making an addition to the declared value. After noting that such an
\norder was subject to an appeal under section 128(1) of the Customs Act
\nand also examining the provisions of Rule 12, it was held as under :-
\n\u201c10. The explanation to Rule 12 makes it clear that the rule
\ndoes not by itself provide a method for determination of
\nvalue but it provides a mechanism and procedure for
\nrejection of declared value in cases where there is reasonable
\ndoubt that the declared value does not represent the
\ntransaction value. Where the declared value is rejected, the
\nvalue has to be determined by proceeding sequentially in
\naccordance with Rules 4 to 9. In the present case, the
\ngrievance of the petitioners turns upon an alleged noncompliance
\nof the provisions of sub-rules (1) and (2) of Rule
\n12.
\n11. Under sub-rule (1) of Rule 12, when the proper officer
\nhas reason to doubt the truth or accuracy of the value
\ndeclared in relation to any imported goods, he may ask the
\nimporter of such goods to furnish further information. This
\ninformation sought may include documents or other
\nevidence. If, after receiving such further information, or in
\nthe absence of a response of the importer, the proper officer
\nstill has reasonable doubt about the truth or accuracy of the
\nvalue so declared, it shall be deemed that the transaction
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\nvalue of such imported goods cannot be determined under
\nthe provisions of sub-rule (1) of Rule 3. Sub-rule (2) of Rule
\n12, provides that at the request of an importer, the proper
\nofficer shall intimate to the importer in writing the grounds
\nfor doubting the truth or accuracy of the value declared in
\nrelation to goods imported by the importer and provide a
\nreasonable opportunity of being heard, before taking a final
\ndecision under sub-rule (1). Explanation (ii) to Rule 12
\nposits an enquiry in consultation with the importer. The
\nsubordinate legislation has expressly incorporated norms
\nrequiring observance of the principles of natural justice.
\n12. The provisions of Rule 12 contain the procedure which
\nthe proper officer is required to follow before rejecting the
\ndeclared value. In the first instance, when the proper officer
\nhas reason to doubt the truth or accuracy of the value, he
\nmay ask the importer to furnish further information
\nincluding documents or other evidence. If upon a scrutiny of
\nthe information he is satisfied with the transaction value
\ndeclared, then in such a case the provisions of Rule 3(1)
\nwould come into operation. On the other hand, if the
\nimporter fails to supply information or if the proper officer
\nstill has reason to doubt the truth or accuracy of the value
\ndeclared despite the information, sub-rule (2) requires him to
\nintimate the importer in writing of the grounds for doubting
\nthe truth or accuracy of the value declared, on the request of
\nthe importer. The object of doing so is to enable the
\nimporter to have a fair opportunity to meet the grounds of
\ndoubt entertained by the proper officer. Rule 12(2)
\nstipulates a requirement of a reasonable opportunity of being
\nheard. Such an opportunity can have meaning only if the
\nimporter is apprised of the grounds on the basis of which the
\ntransaction value is doubted by the proper officer. In the
\nabsence of a disclosure of the grounds on which the doubt is
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\nentertained, the importer would not know of the case against
\nhim nor would he be in a position to explain why the doubt
\nwhich the proper officer entertains as to the truth or accuracy
\nof the value is incorrect. Hence, before the proper officer
\nproceeds to reject the declared value, he is under a mandate
\nto furnish the grounds in writing for doubting the truth or
\naccuracy of the value declared by the importer. Thereupon
\nthe importer must have a reasonable opportunity of being
\nheard to enable him to urge such submissions as he may
\ndesire in writing in regard to the grounds which are set out by
\nthe proper officer. That is the scheme.
\n13. In the present case, as the record before the Court
\nwould indicate, the procedure which is laid down in Rule 12
\nwas not followed. The proper officer initially called upon the
\nimporter to submit documentary material. This was in
\ncompliance with the requirements of Rule 12(1). Upon
\nscrutinising the material, evidently the proper officer had
\nreason to doubt the truth or accuracy of the transaction value
\ndeclared by the importer. The proper officer was required to
\nformulate the grounds on which he entertained a doubt in
\nwriting and to furnish them to the importer. The importer
\nhad no opportunity to call upon the proper officer to disclose
\nthe grounds because the record would indicate that after the
\nimporter submitted a letter dated 25 February, 2013, the
\nDeputy Commissioner of Customs proceeded to dispose of
\nthe case by passing the impugned order, dated 19 March
\n2013. By failing to inform the importer of the grounds of his
\ndoubt and of allowing the importer an opportunity of being
\nheard with reference to those grounds, there has been a clear
\nbreach of principles of natural justice.
\n14. We are not inclined to accede to the submission of
\nCounsel appearing on behalf of the respondents that the
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\npetitioners should be relegated to the remedy of an appeal in
\nthese circumstances. There has been a clear breach of the
\nprinciples of natural justice by the failure on the part of the
\nDeputy Commissioner of Customs to follow the mandatory
\nrequirement of Rule 12. The existence of an alternate
\nremedy of an appeal is not a bar to the maintainability of a
\npetition under Article 226 of the Constitution where there is
\na breach of the principles of natural justice. Moreover, the
\nmere existence of an appellate remedy, it is well settled,
\nwould not remedy a breach of the principles of natural justice
\nat the original stage. We also take serious note of the
\nstatement made in the affidavit in reply to the effect that
\neven if this Court would direct the Deputy Commissioner of
\nCustoms to issue a notice to show cause, the grounds of the
\nnotice would be the same as those contained in the
\nimpugned order and that the quasi judicial order which the
\nauthority would pass would be the same as the Order-in-
\nOriginal, dated 19 March 2013. This is clearly indicative of
\nthe fact that the Deputy Commissioner of Customs has a
\nclosed mind and treats a compliance with the principles of
\nnatural justice as a mere formality. Hence, while we are
\ninclined to set aside the impugned order and remit the
\nmatter back for fresh decision after complying with the
\nrequirements of Rule 12, we direct the Commissioner of
\nCustoms to assign the case to some other officer, other than
\nthe officer by whom the impugned order is passed. We
\nrecord our disapproval of the manner in which the affidavit
\nin reply has been drafted. Counsel for the Revenue, in fact,
\nstated during the hearing that the aforesaid addition was
\nmade by the Deputy Commissioner of Customs on his own
\naccord, without reference to Counsel, and even suggested
\nthat the offending party may be expunged.\u201d
\n27. Thus this Court held that where there is a breach of principles
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\nof natural justice, existence of an alternate remedy of appeal would be no
\nbar to exercise of jurisdiction under Article 226 of the Constitution of
\nIndia.
\n28. In the light of the discussions made above, we are of the
\nunhesitant view that the impugned order in original is clearly unsustainable
\nin law being in violation of the principles of natural justice as well as the
\nstatutory provisions as alluded to hereinabove. In the circumstances,
\nrelegating the petitioner to the forum of appeal does not arise.
\n29. Consequently, we set aside the impugned order in original
\ndated 23.09.2020 and direct that the proper officer may proceed with the
\nmatter afresh, if he is so inclined, by following the mandate of section 124
\nof the Customs Act and Rule 12 of the Customs Valuation (Determination
\nof Value of Imported Goods) Rules, 2007. We further direct that
\nrespondent No.2 shall assign the hearing to a proper officer other than
\nrespondent No.3, who had passed the impugned order in original.
\n30. Writ petition is accordingly allowed to the extent indicated above.
\nHowever, there shall be no order as to cost.
\nMILIND N. JADHAV, J UJJAL BHUYAN, J
\nBGP. 19 of 19
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In the light of the discussions made above, we are of the unhesitant view that the impugned order in original is clearly unsustainable in law being in violation of the principles of natural justice as well as the statutory provisions as alluded to hereinabove. In the circumstances, relegating the petitioner to the forum of appeal does not arise. Consequently, we set aside the impugned order in original dated 23.09.2020 and direct that the proper officer may proceed with the matter afresh, if he is so inclined, by following the mandate of section 124 of the Customs Act and Rule 12 of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007. We further direct that respondent No.2 shall assign the hearing to a proper officer other than respondent No.3, who had passed the impugned order in original<\/p>\n

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