1985 (1) TMI 58 - HC - Customs

Court rules exemption notification does not allow deducting package value from goods for customs duty assessment.

The court dismissed the writ petitions, ruling that the exemption notification does not allow for deducting the value of packages from the value of goods ... Customs valuation Issues Involved:1. Interpretation of Notification No. 184-Cus., dated 2nd August, 1976.2. Whether the value of packages should be excluded from the value of goods for customs duty assessment.3. Applicability of Section 25 of the Customs Act, 1962.4. Validity of customs duty assessment on imported goods in packages.5. Refund of customs duty paid on packages.Detailed Analysis:1. Interpretation of Notification No. 184-Cus., dated 2nd August, 1976The primary issue revolves around whether the exemption notification entitles importers to claim exemption from customs duty on the value of the packages in which the goods are imported. The notification exempts packages from customs duty provided certain conditions are met. The court held that the notification applies to packages as distinct items and does not authorize the deduction of the value of these packages from the value of the goods under Section 14 of the Customs Act. The court emphasized that the exemption notification should be read in light of Section 25, which allows for exemption from customs duty but does not permit altering the valuation method of goods for duty assessment.2. Whether the Value of Packages Should Be Excluded from the Value of Goods for Customs Duty AssessmentThe court examined whether the value of packages should be excluded from the value of goods when calculating customs duty. It was concluded that the value of the goods, as assessed under Section 14, includes the value of the packages, and there is no provision in the Customs Act or the rules made thereunder to deduct the value of the packages. The court stated, 'The value of the goods for the purpose of assessing the duty leviable thereon is to be determined as laid down in Section 14(1)(a), namely, the price at which such or like goods are ordinarily sold or offered for sale for delivery at the time and place of importation or exportation.'3. Applicability of Section 25 of the Customs Act, 1962Section 25 empowers the Central Government to exempt goods from customs duty. The court clarified that this section does not authorize the Central Government to alter the valuation method for goods. The court noted, 'Section 25 as it stood at the relevant time, empowered the Central Government only to exempt from duty any goods which are chargeable to customs duty; it did not empower it to lay down a different mode of valuing the goods.'4. Validity of Customs Duty Assessment on Imported Goods in PackagesThe court upheld the validity of customs duty assessment on goods imported in packages, including the value of the packages. It was held that the exemption notification does not permit the valuation of the goods to be split into principal goods and packages. The court stated, 'The exemption notification does not permit the valuation of the goods in packages being split up into principal goods and packages and exempt the packages from duty.'5. Refund of Customs Duty Paid on PackagesThe petitioners sought a refund of customs duty paid on the value of the packages. The court rejected this claim, stating that the exemption notification only exempts packages from being separately charged to duty and does not provide for deducting the value of the packages from the value of the goods. The court concluded, 'The claim of the petitioners for exclusion of the value of the packages from the value of the goods cannot, therefore, be allowed.'ConclusionThe court dismissed the writ petitions, holding that the exemption notification does not authorize the deduction of the value of packages from the value of goods for customs duty assessment. The court emphasized that the notification only exempts packages from being separately charged to duty and does not alter the valuation method under Section 14 of the Customs Act. The petitioners were not entitled to any relief, and the rules issued in each writ petition were discharged.