In one of the very recent Supreme Court judgements, [1] there is a casual mention about the aspect of reliability of a trade panel. The doubt about the trade panel was that it was made of competitors. Therein lies the real problem about using a trade panel. In this treatise, I propose to discuss the various aspects of reliability of a trade panel as seen from judicial decisions and also from my own experience.
I had seen as Collector of Customs in different Custom Houses that deciding issues on the basis of a trade panel becomes more difficult than when we decide without them. More often than not, the trade panel consists of competitors or business groups inimical to each other even when they are not competitors. There are clear cut divisions in the market of people of different business houses. And it is well-known that if the opinion is given by a trade panel consisting of competitors or enemies, then the panel report is invariably challenged. This makes it more difficult to decide the case. For it will be incumbent on the adjudicator to make available the trade panelists to the importers for cross examination. Therefore, it is much better to decide cases on the basis of hard facts which can be derived from importers’ documents, literature of the manufacturers, test report and so on rather than depending on the trade opinion. The biggest problem of relying on a trade opinion is that the members of the trade, when facing opposition from the importers, may buckle under the pressure of different types including financial persuasion.
There are some items where opinion of trade panel is essential. These are diamonds, both uncut and polished and ornaments. The courts have accepted such opinions when they have been made available to the assessee.
The Trade panel is not the same thing as trade parlance. Trade parlance refers to the consensus of people in an over all manner. For example, whether charcoal is coal or betel leaf[2] is vegetable is a matter of trade parlance, i.e. popular understanding. But trade panel consists of a few experts who are supposed to be dealing with the subject for many years and are authorities on the subject. For example, a machine is a lathe machine or a machining centre can be decided by a trade panel, which has special knowledge on it also taking into account the manufacturer’s literature.
Coming to the judicial decisions we find that if the opinion of the trade panel must be supplied[3] to the opponent and its objections are to be taken into account by the adjudicator to make it legally acceptable[4]. There is no definitive judgement by the Supreme Court on this issue.
The conclusion is that it is advisable not to use trade panel as much as possible. It can be restricted only to cases like diamonds, the valuation of which becomes a matter of opinion and the departmental officers usually do not know it. However, there are diamond experts in the department also. Therefore, the trade panel should be made to consist of different groups from the trade and also the department. This will make the opinion more broad based and therefore, more reliable. But if it is done in an extreme case, the trade panel's opinion must be made available to the assessee and his objection must be taken account of in deciding the case. If the assessee wants to cross examine the panelists, they have to be allowed to be cross-examined. The expert opinion should be supplemented by manufacturers literature and test reports etc. to make the conclusion more acceptable.
[1] CCE vs. Mahalakshmi Gems –2008(231)ELT198(SC)
[2] Ramavatar Budhiprasadv. STO –MANU/SC/0320/1961: AIR1961SC1325
[3] N.K. Paramasivam vs. UOI- 1978 (4) E.L.T. (J 14)(Mad.)
[4] N.K. Paramasivam vs. UOI -MANU/TN/0404/1977: 1979(4)ELT14(Mad) & Mansarovar Pearls vs. CC- MANU/CE/3189/2001: 2001 (134) E.L.T. 59 (Tri. - Del.)