CESTAT Directs Re-Adjudication of Customs Matter after Authority Fails to Furnish Test Reports [Read Order]

The Customs, Excise, and Service Tax Appellate Tribunal (CESTAT), Eastern Zonal Bench, Kolkata, has set aside an order and directed fresh adjudication in a customs dispute involving Shyam Sel & Power Limited and Shyam Metalics & Energy Limited. The tribunal ruled that the customs authorities had failed to provide test reports to the appellants before finalizing the assessment, violating principles of natural justice.

The case pertained to the classification and valuation of imported manganese ore, where the customs department relied on test reports to reassess the duty liability. The Assistant Commissioner of Customs (Preventive), Bhubaneswar Commissionerate, had finalized the assessment, leading to an increased demand for duty. The appellants challenged this assessment, arguing that they were never provided with copies of the test reports or given an opportunity to contest the findings before the assessment was concluded.

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In their appeal, the appellants contended that the department’s reliance on undisclosed test reports deprived them of the chance to present counterarguments. They argued that withholding such crucial documents was a clear violation of their right to a fair hearing. They further emphasized that any assessment based on undisclosed reports was legally unsustainable.

The Commissioner of Customs (Appeals) had earlier accepted that the test reports were not furnished to the appellants. However, instead of setting aside the assessment, the Commissioner upheld the duty demand. Dissatisfied with this decision, the appellants escalated the matter to CESTAT.

The tribunal, consisting of Judicial Member R. Muralidhar and Technical Member K. Anpazhakan, observed that the customs authorities had an obligation to share the test reports before finalizing the assessments. The bench ruled that failure to do so constituted a violation of natural justice, as the appellants were denied an opportunity to rebut the findings. CESTAT held that assessments made without furnishing key evidence to the affected parties cannot be sustained under the law.

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Considering these factors, the tribunal set aside the Commissioner (Appeals)’s order and directed the Assistant Commissioner of Customs to provide copies of the test reports to the appellants and re-adjudicate the case. The tribunal emphasized that fresh adjudication should be conducted in accordance with the law and after granting the appellants a proper opportunity to present their case.

This ruling reinforces the importance of procedural fairness in customs assessments, ensuring that importers are given access to all relevant documents and a fair hearing before any liability is determined.

To Read the full text of the Order CLICK HERE

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