By TIOL News Service

MUMBAI, DEC 26, 2014: THE Commissioner of Customs (Appeals), Mumbai - II dismissed the appeals filed by the appellant and its proprietor for non-compliance with the provisions of Section 129E of the Customs Act, 1962.

In the interim order dated 22/01/2013, the only reason given for ordering pre-deposit is that the instant case involves a pre-meditated modus operandi and, therefore, a prima facie case is made out in favour of Revenue. Accordingly, the lower appellate authority haddirected the Proprietor to pre-deposit Rs.5 lakhs and the appellant was directed to pre-deposit Rs.48,29,708/- being the differential duty confirmed in the order passed by the adjudicating authority.

Before the CESTAT the appellant submitted that the interim order was passed without hearing the appellant and it was an ex-parte order and none of the submissions made by the appellants in their appeal memorandum have been considered while disposing of the stay petition.

Inasmuch as the case involves allegation of undervaluation of tools imported from Singapore and the charge of the Revenue is that, when compared with the price of identical/similar goods imported by authorised dealers in India and also price declarations made by the exporter in Singapore, the prices declared by the importer-appellant is low and is only about 1/4 th or the 1/6 th of the price declared by others. Further, the appellant had submitted before the appellate authority contemporaneous values of the imports made by several other importers of identical / similar goods in a few cases which compare well with the value declared by the appellant; however, these have not been considered by the appellate authority.

The AR submitted that there is a "solid" basis for enhancement of value by the adjudicating authority and there are evidences by way of reports obtained through the official channels and also imports made by authorised distributors/dealers of the foreign manufacturers. Therefore, in the absence of a satisfactory explanation for the low values declared, the charge of undervaluation sustains and, therefore, the appellant should be put to terms.

The Bench observed -

++ Neither in the interim order nor in the final order passed by the lower appellate authority, there is any finding or reasoning given as to why the appellant was directed to make a pre-deposit of Rs.5 lakhs by the proprietor and the entire differential duty liability by the proprietary firm.

++ There is only one single sentence by way of which the appellate authority has come to the decision to order pre-deposit and the said statement reads as under:

++ We are afraid these sentences cannot constitute sufficient reasons for ordering pre-deposit. Inasmuch as the lower appellate authority has not given sufficient reasons for ordering the pre-deposit, the matter has to go back to the said authority for disposal of the appeal on merits.

In fine, the matter was remanded to the Commissioner(A) for passing an order on merits. The Bench also observed that since it was remanding the matter, it will not be appropriate to order any pre-deposit.

(See 2014-TIOL-2609-CESTAT-MUM)