1985 (1) TMI 67 - HC - Customs

Court dismisses petition, Customs Authorities can enforce duty rates, deny relief claims, vacate interim orders

The court dismissed the petition, ruling against the petitioner on all issues. The Customs Authorities were allowed to enforce the enhanced duty rates, ... Customs - Rate of duty - Valuation - Estoppel - Promissory estoppel - Steel Sheets Issues Involved:1. Promissory Estoppel2. Classification of Imported Goods3. Valuation and Inclusion of Additional ChargesDetailed Analysis:1. Promissory Estoppel:The petitioner argued that the Customs Authorities should be restrained from realizing the enhanced rate based on the principle of Promissory Estoppel. The petitioner claimed that the Central Government had made a representation that the import of the said materials would be entitled to exemption from Auxiliary duty in excess of 20% and countervailing duty in excess of Rs. 850/- plus 10% per metric tonne. The petitioner acted on this representation and entered into the contract for import. However, the court held that there could be no estoppel against statute and the sovereign power of the government to legislate. The Government was at liberty to alter the rate of duty by subsequent amendments. The court referred to the case of M/s. 3it Ram Shiv Kumar & Others v. Ram Niwas Gupta & Others, where it was held that the principles of Estoppel were not available against the Government in the exercise of legislative, sovereign, or executive power. The court concluded that the doctrine of promissory estoppel could not be invoked to compel the Government to act against statutory obligations.2. Classification of Imported Goods:The petitioner contended that the goods imported, described as 'Cold Formed Sections from sheets,' fell under Chapter 21 of the Import & Export Policy for the year 1982-83 and could be imported under Open General Licence. However, the Customs Authorities argued that the goods were actually 'Prime Galvanized Corrugated Sheets,' which fell under Serial No. 60 of Appendix VIII and could only be imported through a specific import licence via the Steel Authority of India. The court agreed with the Customs Authorities, noting that the petitioner's description of the goods was manipulated to gain the benefits of both Open General Licence and duty exemptions. The court held that the goods were indeed 'Prime Galvanized Corrugated Sheets' and the petitioner was not entitled to import them under Open General Licence.3. Valuation and Inclusion of Additional Charges:The petitioner was aggrieved by the inclusion of loading, unloading, handling charges, insurance, and other expenses in the valuation of the goods for customs duty assessment. The petitioner argued that the assessment should be based on the valuation given under the agreement between the importers and the foreign seller, which was on a C.I.F. basis. The court, however, held that under Section 14 of the Customs Act, the value of imported goods is deemed to be the price at which such goods are ordinarily sold or offered for sale for delivery at the time and place of importation. The court referred to several cases, including M/s. Prakash Cotton Mills (P) Ltd. v. B. Sen & Others, which clarified that the valuation for customs duty purposes includes freight, insurance charges, and other handling charges. The court concluded that the Customs Authorities were justified in including these additional charges while assessing the value for customs duty.Conclusion:The court dismissed the petition, holding that the petitioner was not entitled to any reliefs. The application was dismissed, the rule discharged, and all interim orders vacated. The Customs Authorities were granted liberty to encash the bank guarantee. The court refused the prayer for a stay, noting the difficulties faced by the Customs Authorities in assessing the goods and realizing revenue due to the interim order.