TaxTMI 
TaxTMI 
2014 (4) TMI 908
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.... ton which is also a subject matter of challenge in the aforesaid writ petitions. In some of the writ petitions, a show cause notice issued by the Commissioner of Customs (Preventive), West Bengal, Kolkata contemplating to confiscate the aforesaid goods under Section 111(d) of the Customs Act, 1962 for violation of the non-fulfillment of the policy condition enshrined under the said notification dated 13th May, 2013 and imposition of penalty under Section 112 of the said Act is also assailed before this Court. Admittedly the Foreign Trade Policy does not prohibit the importation of the areca nuts/betel nuts absolutely, which can be deciphered from the impugned notification dated 13th May, 2013 that it is freely importable. However, conditions have been imposed wherein the import is permissible provided the CIF Value is Rs. 110/- per kg and above. The entire thrust of the argument is founded on the legality of the said notification issued by the Director General of Foreign Trade (DGFT), though it reflects that the Central Government have imposed such conditions by amending the Foreign Trade Policy, 2009-2014. It would be relevant to record that the impugned notification dated 13t....
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.... Official Gazette but excludes the power to be exercised by the Central Government under Section 3, 5, 15, 16 & 19 of the said Act. He, thus, submits that power to formulate and amend the export & import policy cannot be delegated to the DGFT by the Central Government in view of the clear embargo created under Section 6(3) of the FTDR Act. He strenuously submits that Article 53 (1) of the Constitution of India vest the executed power of the Union in the President to be exercised directly or through the officers subordinate to him in accordance therewith. Thus, he submits that the notification amending the Foreign Trade Policy is required to be issued in the name of the President or in the name of a person subordinate to him, if duly authorized. By referring Article 77 (1) of the Constitution, Mr. Datta contends that all the executive action of the Government are expressed to be taken in the name of the President and to facilitates the smooth transaction of business of the Government of India, the President can make the Rules under Article 77 (3) of the Constitution. Since the Rules are intended for the smooth and convenient transaction of the business of the Government of India, it....
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....ment of the Bombay High Court in case of Narendra Udeshi -vs- Union of India & Others reported in (2003) 1 Bom LR 315. By placing reliance upon the provisions contained under Section 3 (2) of the FTDR Act, Mr. Datta submits that such power of prohibition, restriction and otherwise regulating is within the exclusive domain of the Central Government which cannot be delegated to the DGFT in view of the embargo created under Section 6 (3) of the FTDR Act. He further submits that such prohibition and/or restriction can only be regulated by an Order which is required to be placed before each house of the Parliament for approval as required under Section 19 (3) of the FTDR Act. According to him, the conditions imposed for import of the areca nuts, when the policy says, it is freely importable, amounts to a restrictions which can only be made by an Order under Section 3 (2) of the FTDR Act provided the procedure incorporated therein are adhere to. He, thus, submits that if a thing is required to be done in a certain manner, it should be done in such manner and not at all as held in case of Nazir Ahmed -vs- King Emperor reported in AIR 1936 PC 253. According to him, the prohibition can also....
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.... to the transaction value in invocation of the powers under Section 5 of the FTDR Act. He succinctly submits that the impugned notification cannot withstand as the price fixation is a legislative function and beyond the competence of the DGFT. In support of the above contentions, he relies upon a judgment of the Apex Court in case of Union of India -vs- Cynamide India Limited & Anr; reported in (1987) 2 SCC 720. Mr. Pranab Kumar Datta, the learned Advocate appearing in some of the other writ petitions adopts the submissions of Mr. Kishore Datta and additionally submits that the artificial fixation of price for importation of the goods offends the provision of Customs Valuation (determination of value of imported goods) Rules 2007. According to him, the FTDR Act was enacted for development and regulation of the Foreign Trade by facilitating imports and augmenting exports from India. Section 5 of the said Act empowers the Central Government to formulate and announce, by notification, the Foreign Trade Policy with further power to amend it. The powers and functions of the DGFT is provided under Section 6 of the said Act wherein Sub-Section 3 excludes the power of the Central Govern....
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....notification is impermissible and is also liable to be quashed and set aside. Mr. Arijit Banerjee, the learned Advocate appearing in other writ petitions also adopts the submissions of Mr. Kishore Datta & Mr. Pranab Kumar Datta. He additionally submits that at the time of submissions of the bill of industry, the importer has to make a declaration that the content therein are true and the correct statement of facts. Any other declaration would amount to a false and wrong declaration which may attract the initiation of criminal and penal proceedings. According to him, the Foreign Trade Policy for the year 2009-2014 announced by the Central Government under Section 5 of the FTDR Act, is notified by the DGFT as Ex-Officio Additional Secretary to the Government of India, but the impugned notification is issued by the DGFT alone and, therefore, cannot be a valid and legal. Mr. Bose, the learned Advocate appearing for the Director General of Foreign Trade, at the very outset, supports the impugned notification on the plea that the DGFT has conveyed the decisions of the Central Government amending the conditions in the policy. He succinctly argues that Section 2 (8) of the General Cl....
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....pon a judgment of the Supreme Court in case of M/s. Bijoya Lakshmi Cotton Mills Ltd. -vs- State of W.B. & Others; reported in AIR 1967 SC 1145, Mr. Bose would contend that although the executive action of the Union is vested in the President but it is actually performed by the Ministers under the Allocation of Business Rules through the various departments specified in Second Schedule and if there is a substantial compliance thereof, such executive action cannot be assailed in a judicial proceedings. He would further contend that the Rules of Business and Allocation thereof amongst the Ministers are relatable to the provisions contained under Article 53 of the Constitution which is exercisable by the President directly or through the subordinate Officers and placed reliance upon a judgment of the Supreme Court in case of Ishwar Chand Agarwal -vs- State of Punjab reported in AIR 1974 SC 2192 and in case of A. Sanjeevi Naidu -vs- State of Madras reported in AIR 1970 SC 1102. He further submits that the Central Government can not only formulate and/or announce the Foreign Trade Policy but can regulate by amending the same by putting restrictions in terms of Section 5 read with Section....
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....ly quoted as under: "5. Foreign Trade Policy.- The Central Government may, from time to time, formulate and announce, by notification in the Official Gazette, the foreign trade policy and may also, in like manner, amend that policy: Provided that the Central Government may direct that, in respect of the Special Economic Zones, the foreign trade policy shall apply to the goods, services and technology with such exceptions, modifications and adaptations, as may be specified by it by notification in the Official Gazette." The Central Government announces the Foreign Trade Policy on regular intervals and the policy in vogue today which is a subject matter in this writ petition is Foreign Trade Policy, 2009-2014. Paragraph 2.1 contained in Chapter II relates to general provisions pertaining to import and export wherein the export and import is free except where regulated by the said policy or any other law in force. It further provides that the Item wise export and import policy shall be specified in ITC (HS) notified by DGFT as amended from time to time. The functions of the DGFT can be deciphered from Section 6 of the FTDR Act which is primarily to advise the Central Governme....
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....provider is availing benefits under the foreign trade policy or is dealing with specified services or specified technologies. (3) All goods to which any Order under sub-section (2) applies shall be deemed to be goods the import or export of which has been prohibited under section 11 of the Customs Act, 1962 (52 of 1962) and all the provisions of that Act shall have effect accordingly. (4) Without prejudice to anything contained in any other law, rule, regulation, notification or order, no permit or licence shall be necessary for import or export of any goods, nor any goods shall be prohibited for import or export except, as may be required under this Act, or rules or orders made thereunder." The expression 'Order' is defined under Section 2 (h) of the FTDR Act to mean any Order made by the Central Government under Section 3 of the said Act. The expression 'prohibition' is of wide amplitude. Any pedantic and restrictive meaning would frustrate the intendment for which such prohibitions are incorporated in the legislation. It admits no quarrel that the imposition of conditions or restrictions is imbibed within the expression 'prohibition'. Apart from section 3 (2) of the sai....
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....ctions embargo and prohibition created in any other law in force. The contentions of the respondent, if accepted, would lead to the proposition that the executive action of the DGFT is deemed to be the action of the Central Government despite the specific embargo created under Sub-section 3 of Section 6 of the FTDR Act. Though the Allocation of Business Rules entrusted the DGFT to act for the Central Government but in view of the specific embargo created under Sub-section 3 of Section 6, the Central Government cannot delegate the power enshrined under Section 3, 5, 15, 16 & 19 of the said Act to be exercised by the DGFT. In case of Dattatraya Moreshwar (supra), one of the point before the Constitutional Bench was whether the order passed under Section 11 of the Preventive Detention Act is invalid as it has not been expressed in the manner laid down in Article 166 of the Constitution. It was sought to be argued that the order passed by the Assistant Secretary to the Home Department who is otherwise authorized under the Rules framed by the Governor of the State to sign orders and instruments for the Government of the State is invalid, the Court held: "18. The other contention r....
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....rovisions of either of the clauses would lead to this result that the order in question would lose the protection which it would otherwise enjoy, had the proper mode for expression and authentication been adopted. It could be challenged in any Court of law even on the ground that it was not made by the Governor of the State and in case of such challenge the onus would be upon the State authorities to show affirmatively that the order was in fact made by the Governor in accordance with the rules framed under Art. 166 of the Constitution. This view receives support from a pronouncement of the Federal Court in J.K. Gas Plant Manufacturing Comp. Ltd. -vs- Emperor, 1947 FCR 141, where a somewhat analogous provision contained in S. 49 (1), Schedule IX of the Government of India Act, came up for consideration and the provision was held to be directory and not imperative. 19. Even if Cl. 1 of Art. 166 is taken to be an independent provision unconnected with Cl.(2) and having no relation to the purpose which is indicated therein, I would still be of opinion that it is directory and not imperative in its character. It prescribes a formality for the doing of a public act. As has been said ....
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....ere is compliance with these provisions all that is necessary to be seen is whether there has been substantial compliance with those requirements. In the present case there can be no manner of doubt that the notice signed by the Chief Secretary of the State and expressed to be on behalf of the Government and giving opportunity to the petitioner to show cause against the action proposed to be taken against him was in substantial compliance with the provisions, of the article. The petitioner accepted this notice and in pursuance of it applied for further time to put in his defence. He was twice granted this time. In these circumstances, the contention of Mr. Thomas that as the notice was not expressed as required under Article 166 it was invalid and therefore the requirements of Article 311 were not satisfied in this case must be held to be devoid of force. We are satisfied that all the requirements of Article 311 have been fully complied with in this case. It may also be mentioned that the High Court held that H. H. the Rajpramukh had intimation of the decision of the Council of Ministers and the action proposed to be taken against the petitioner and that in fact His Highness approv....
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....stitution for convenient transaction of the business of the Government of India and the allocation among the Ministers in relation to the decision of any Ministers or Officers but such rules cannot override the provisions of the Act or the statutory rules as held in State of Haryana -vs- Shri P.C. Wadhwa, IPS, Inspector General of Police & another reported in 1987 SC 1201 in these words: "10. * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * The Rules of Business that have been framed under Article 166 cannot override the provisions of the Act or any statutory rules." Therefore, under the Allocation of Buiseness Rules, DGFT is a subordinate officer to discharge the functions of the Central Government expect where it acts as a delegatee under the FTDR Act. The notification announcing the Foreign Trade Policy, 2009-2014 was published under the aegis of the DGFT who is also an Ex-Officer Additional Secretary to the Government of India. Therefore, the DGFT not only assumes the power as a delegatee of the Central Government under Section 6 of the FTDR Act but is further competent as an authorized officer under the Allocation of Business Rules on behalf of the Centr....
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....he Secretary to the Government of Madras in the Industries, Labour and Housing Department. The rule further provides that cases relating to such powers and functions of the State transport undertaking under Section 68(C) need not be submitted to the Minister in-charge. Under sub-clause (2) of that rule, the powers and functions of the State Government under Section 68(D) of the Act and the rules relating thereto are directed to be exercised and discharged by the Secretary to the Government in the Home Department. Rule 4 of "the Rules" deals with allocation and disposal of business. It provides that the business of the Government shall be transacted in the department specified in the 1st Schedule and classified and distributed between those departments as laid down therein. Rule 5 says that Governor shall, on the advice of the Chief Minister allot the business of the Government among the Ministers, assigning one or more departments to the charge of a Minister but the proviso to that rule says that nothing in that rule shall prevent the assigning of one department to the charge of more than one Minister. Rule 6 prescribes that each department of the secretariat shall be under a Se....
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.... DGFT as a delegatee cannot exercise the power of the Central Government conferred under Section 5 of the FTDR Act. The judgment of the Madras High Court assumed some importance on the factual matrix that at the time of announcing the Foreign Trade Policy, 2004-2009, the conditions were imposed in a notification issued by the DGFT under which the import is permissible provided the CIF Value is Rs.35 per kg and above, when the policy says that it is freely importable. The Court held that imposition of conditions amounts to restrictions and DGFT has no power under Section 5 of the FTDR Act nor the Central Government can do so under the aforesaid provisions. It was ultimately held that the said notification is bad and was subsequently quashed with following observations: "26. This Court has already found that the second respondent has no power to issue the notification under Section 5 read with Section 6 (3) of the FTDR Act. Further, that the price fixing on an artificial basis cannot be done and that too under the FTDR Act. It has to be done in the light of the enactments such as the Customs Act and the Customs Tariff Act. No material data have been furnished for arriving at the f....
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....wer does not invalidate the entire executive action. It leads to an another point whether the imposition of condition amounts to restriction/prohibition and otherwise regulation, which can be imposed in exercise of the power under Section 5 of the FTDR Act by the Central Government. The said provision contemplates the formulation and/or announcement of the Foreign Trade Policy by the Central Government with further power to amend it. The power of prohibit, restrict or otherwise regulate the Foreign Trade Policy is further conferred upon the Central Government under Section 3 (2) of the FTDR Act. Putting of any conditions which fetters the free import amounts to restriction and can be brought within the wider meaning thereof. The reference can be conveniently made to the definition of a prohibited goods enshrined under the Custom Act, 1962 which provides that any goods of the import or export which is subject to the prohibition under the said Act or any other law for the time being in force but does not include any goods in respect of which the conditions subject to which the goods are permitted to be imported or exported when complied with. It can be deciphered without any ambig....
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....ector of Customs, wherein it was contended that the expression "prohibition" used in Section 111(d) must be considered as a total prohibition and that the expression does not bring within its fold the restrictions imposed by clause (3) of the Import Control Order, 1955. The Court negatived the said contention and held thus: (SCC p. 732, para 11) "What clause (d) of Section 111 says is that any goods which are imported or attempted to be imported contrary to 'any prohibition imposed by any law for the time being in force in this country' is liable to be confiscated. 'Any prohibition' referred to in that section applies to every type of 'prohibition'. That prohibition may be complete or partial. Any restriction on import or export is to an extent a prohibition. The expression 'any prohibition' in Section 111(d) of the Customs Act, 1962 includes restrictions. Merely because Section 3 of the Imports and Exports (Control) Act, 1947, uses three different expressions 'prohibiting', 'restricting' or 'otherwise controlling', we cannot cut down the amplitude of the word 'any prohibition' in Section 111(d) of the Act. 'Any prohibition' means every prohibition. In other words all types of p....
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....y, 2009-2014 relating to the general provision regarding import and export. Paragraph 2.1 of the Foreign Trade Policy, 2009-2014 clearly provides the import and export, to be free except, where regulated by Foreign Trade Policy or any other law in force. It further provides that the Item wise export and import policy shall be notified by the DGFT as amended from time to time. According to the respondent, Paragraph 2.6 of the policy empowers the DGFT to adopt and enforce any measure under the principles of restrictions through a notification. It is relevant to quote the source of power of restriction of the DGFT under Paragraph 2.6 of the Foreign Trade Policy, which reads thus: "2.6. DGFT may, through a notification, adopt and enforce any measure necessary for:- (i) Protection of public morals. (ii) Protection of human, animal or plant life or health. (iii) Protection of patents, trademarks and copyrights and the prevention of deceptive practices. (iv) Prevention of use of prison labour. (v) Protection of national treasures of artistic, historic or archaeological value. (vi) Conservation of exhaustible natural resources. (vii) Protection of trade of fissionab....
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.... (i) the establishment of any industry; (j) the prevention of serious injury to domestic production of goods of any description; (k) the protection of human, animal or plant life or health; (l) the protection of national treasures of artistic, historic or archaeological value; (m) the conversation of exhaustible natural resources; (n) the protection of patents, trade marks, copyrights, designs and geographical indications; (o) the prevention of deceptive practices; (p) the carrying on of foreign trade in any goods by the State, or by a Corporation owned or controlled by the State to the exclusion, complete or partial, or citizens of India; (q) the fulfillment of obligations under the Charter of the United Nations for the maintenance of international peace and security; (r) the implementation of any treaty, agreements or convention with any country; (s) the compliance of imported goods with any laws which are applicable to similar goods produced or manufactured in India; (t) the prevention of dissemination of documents containing any matter which is likely to prejudicially affect friendly relations with any foreign State or is derogatory to nation....
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....e. Section 3 (2) (c) empowers the Central Government to make Order for controlling the price at which any essential commodity may be bought or sold. In exercise of the power conferred upon the Central Government under the Essential Commodities Act and the Drug (Prices Control) Order, 1979 was made wherein notifications were issued fixing the maximum price at which various indigenous manufacturing bulk drugs may be sold by the manufacturer. The said notification was assailed before the High Court and ultimately the matter reached before the Supreme Court. In the above perspective, it was held that ordinarily the fixation of price or determination of price is legislative action, which is not a rule of rigidity. The Supreme Court in unequivocal and clear terms indicated that the price fixation is neither the function nor the forte of the Court. The exception to the above rule is also indicated when the price fixation may assume an administrative or quasi-judicial character than the legislative activity, Para 7 of the said report can be conveniently quoted for the above proposition: "7. The third observation we wish to make is, price fixation is more in the nature of a legislative a....
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....islative and non-legislative acts. A price fixation measure does not concern itself with the interests of an individual manufacturer or producer. It is generally in relation to a particular commodity or class of commodities or transactions. It is a direction of a general character, not directed against a particular situation. It is intended to operate in the future. It is conceived in the interests of the general consumer public. The right of the citizen to obtain essential articles at fair prices and the duty of the State to so provide them are transformed into the power of the State to fix prices and the obligation of the producer to charge no more than the price fixed. Viewed from whatever angle, the angle of general application, the prospectiveness of its effect, the public interest served, and the rights and obligations flowing therefrom, there can be no question that price fixation is ordinarily a legislative activity. Price fixation may occasionally assume an administrative or quasi-judicial character when it relates to acquisition or requisition of goods or property from individuals and it becomes necessary to fix the price separately in relation to such individuals. Such s....
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....h the economic policy nor with the rates unless it is based on extraneous and irrelevant consideration while determining the price. The fixation of price though ordinarily a legislative activity but may assume an administrative and quasi-judicial character when it relates to the acquisition and requisition of goods or property from the individuals. Apart from the said proposition of law, the petitioners could not demonstrate in the pleading that the fixation of price at Rs.110/- per kg & above is based on the irrelevant or extraneous consideration. On the other hand, the respondents have justified the fixation of price to be based upon the price prevalent in the indigenous market and the cost of production and/or cultivation. I don't wish to delve deep into the matter in absence of any specific pleadings except to say that generally a price fixation is a legislative activity but may assume administrative and quasi-judicial character occasionally. To conclude the above point, I thus held that the impugned notification cannot be sustained on whichever angle it is viewed and is, therefore, quashed and set aside. Notification dated 25th June, 2013 issued by the Director of Gov....
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.... disposal thereof. Section 12 of the Act is the charging section. Under this section, the duty is leviable on all imported goods. Valuation of the imported goods is done as provided under Section 14 of the Act. Section 25 of the Act empowers the Central Government to issue notifications exempting generally either absolutely or subject to such conditions as specified in the notification, goods of any specified description from the whole or any part of the customs Act (sic duty) leviable thereon. 14. The definition of imported goods has to be read along with Section 111 of the Act which deals with goods brought from place outside India. Section 111 of the Act provides for confiscation of goods and conveyances and imposition of penalties. Section 111(d) of the Act provides that any goods which are imported or attempted to be imported or are brought within Indian customs waters for the purpose of being imported, contrary to any prohibition imposed by or under this Act or any other law for the time being in force, shall be liable for confiscation. Section 112 of the Act provides for penalties for improper importation of goods." The levy and exemption of the customs duties are prov....
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....: Provided also that such price shall be calculated with reference to the rate of exchange as in force on the date on which a bill of entry is presented under section 46, or a shipping bill of export, as the case may be, is presented under section 50. (3) Notwithstanding anything contained in sub-section (1), if the Board is satisfied that it is necessary or expedient so to do, it may, by notification in the Official Gazette, fix tariff values for any class of imported goods or export goods, having regard to the trend of value of such or like goods, and where any such tariff values are fixed, the duty shall be chargeable with reference to such tariff value. Explanation- For the purposes of this section- (a) "rate of exchange" means the rate of exchange- (i) determined by the Board, or (ii) ascertained in such manner as the Board may direct, for the conversion of Indian currency into foreign currency or foreign currency into Indian currency; (b) "foreign currency" and "Indian Currency" have the meanings respectively assigned to them in clause (m) and clause (q) of section 2 of the Foreign Exchange Management Act, 1999" The tariff value is defined under Sectio....
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....the sale or price is not subject to some condition or consideration for which a value cannot be determined in respect of the goods being valued; (c) no part of the proceeds of any subsequent resale, disposal or use of the goods by the buyer will accrue directly or indirectly to the seller, unless an appropriate adjustment can be made in accordance with the provisions of rule 10 of these rules; and (d) the buyer and seller are not related, or where the buyer and seller are related, that transaction value is acceptable for customs purposes under the provisions of sub-rule (3) below. (5) (a) Where the buyer and seller are related, the transaction value shall be accepted provided that the examination of the circumstances of the sale of the imported goods indicate that the relation ship did not influence the price. (b) in a sale between related persons, the transaction value shall be accepted, whenever the importer demonstrates that the declared value of the goods being valued, closely approximates to one of the following values ascertained at or about the same time. (i) the transaction value of identical goods, or of similar goods, in sales to unrelated buyers in India; ....
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....td. decided in favour of the respondents and held that as the goods were exempt from payment of tax on the day when they entered the territorial waters no customs duty was payable. 5. In our opinion, this question is no longer res integra. At least two decisions of this Court, namely, Bharat Surfactants (P) Ltd. v. Union of India and Dhiraj Lal H. Vohra v. Union of India were directly concerned with a similar contention that had been raised. Dealing with the same, this Court has in clear terms come to the conclusion that what is relevant is the day on which the bill of entry in respect of the goods is presented under Section 46 and in the case of goods which are warehoused the relevant date would be the date on which the goods are actually removed from the warehouse. It is no doubt true that in Bharat Surfactants this Court did observe that it did not express any opinion with regard to the soundness of the view taken by the Bombay High Court in Sylvania & Laxman case and in the judgment under appeal but, nevertheless, as we read the said judgment, the conclusion of this Court in Bharat Surfactants was contrary to the view expressed by the Bombay High Court. We do not find that t....
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....d Indian territorial waters on February 20, 1989 and was ready to discharge the cargo is not relevant for the purpose of Section 15(1) read with Sections 46 and 31 of the Act. The prior entries regarding presentation of the bill of entry for clearance of the goods on February 27, 1989 and their receipt in the appraising section on February 28, 1989 also are irrelevant. The relevant date to fix the rate of customs duty, therefore, is March 2, 1989. The rate which prevailed as on that date would be the duty to which the goods imported are liable to the impost and the goods would be cleared on its payment in accordance with the rate of levy of customs prevailing as on March 2, 1989." In case of Garden Silk Mills Ltd. -vs- Union of India reported in (1999) 8 SCC 744, the point arose whether the landing charges can be added and/or included in ascertaining the value of the imported goods. It is held that the taxable event would arise when the goods reaches at the customs barriers and is allowed to become a part of the mass of goods in these words: 13. All imported goods unloaded in a customs area are required to remain under the Customs Authorities until they are cleared for home c....
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....material is the day when the goods had entered the territorial waters because by virtue of Section 2(23) read with Section 2(27) the import into India had taken place when the goods entered the territorial waters. Following the decision of this Court in Bharat Surfactants (P) Ltd. v. Union of India and Dhiraj Lal H. Vohra v. Union of India this Court came to the conclusion in Apar (P) Ltd. case that the duty has to be paid with reference to the relevant date as mentioned in Section 15 of the Act. 17. It was further submitted that in the case of Apar (P) Ltd. this Court was concerned with Sections 14 and 15 but here we have to construe the word "imported" occurring in Section 12 and this can only mean that the moment goods have entered the territorial waters the import is complete. We do not agree with the submission. This Court in its opinion in Bill to Amend Section 20 of the Sea Customs Act, 1878 and Section 3 of the Central Excises and Salt Act, 1944, Re SCR at p. 823 observed as follows: "Truly speaking, the imposition of an import duty, by and large, results in a condition which must be fulfilled before the goods can be brought inside the customs barriers, i.e., before t....
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....d the buyer have no interest in the business of each other and the price is the sole consideration for the sale ...". Subject to these three conditions laid down in Section 14(1) of time, place and absence of special circumstances, the price of imported goods is to be determined under Section 14(1-A) in accordance with the Rules framed in this behalf. In absence of any fixation of a tariff value by the Board, the recourse to Sub-section 1 of Section 14 can be resorted to and not otherwise. The contention of the petitioners that the Board cannot fix the tariff value is unacceptable and runs contrary to the intendment of the legislation. The other point taken by the petitioner to assail the impugned notification is that Sub-section 2 of Section 14 of the Customs Act requires the satisfaction of the Board in relation to the trend of values of such or like goods. The petitioner says that there is no recording of satisfaction both subjectively and objectively with regard to the trend of values of the similar or like goods and, therefore, the impugned notification is liable to be quashed and set aside. It is further contended that unless there is a valid reason for fixation of a tarif....
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....f Section 4 under which the statute itself fixes the value for the majority of cases. But where one had got bogged down, possibly due to certain earlier observations of this Court in a different context, was in thinking that the value of goods can only comprise of manufacturing cost and profit. Actually it has been made to depend on the wholesale price of the manufacturer concerned under Section 4 (old and new). But this need not be the sole criterion. The value may be derived with reference tot he wholesale price, the retail price or the average price at which the goods are sold by the manufacturer concerned or even by the price at which the goods are sold by any particular person or place or the average price which the goods command in the whole country or any part thereof. It can be fixed at the lowest of such prices, at the highest of such prices or at some average (mean, media mode etc.) of such prices as the Government may consider appropriate in the case of any particular commodity." The Supreme Court in Paragraph 11 of the said reports ultimately held: "11. In our opinion, the tariff value has been notified under Section 3(2) for valid reasons and on germane grounds h....
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.... be quashed on the ground of mala fides dishonesty or corrupt purpose. Even if it is passed in good faith and with the best of intention to further the purpose of the legislation which confers the power, since the Authority has to act in accordance with and within the limits of that legislation, its order can also be challenged if it is beyond those limits or is passed on grounds extraneous to the legislation or if there are no grounds at all for passing it or if the grounds are such that no one can reasonably arrive at the opinion or satisfaction requisite under the legislation." No case of such nature has been made out in the present case. It would be deciphered from the impugned notification that the authorities took note of the trend of the value of such or like goods and, therefore, the presumption lies in favour of upholding the notification. This Court, therefore, does not find that the impugned notification, which is issued in exercise of the power under Sub-section 2 of Section 14 can be invalidated on the grounds taken by the petitioner. Show Cause Notice The power of judicial review should not be exercised when challenge is made to a show cause notice unless the....
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....oners have not only challenged the show cause notice after giving reply but have also challenged the impugned notification dated 13th May, 2013 and 25th June, 2013 which forms the basis of the issuance of the said show cause notice. There is no impediment in maintaining the writ petitions even after filing of the reply. In this regard, the reliance can be conveniently placed upon a decision by this Court in case of Suttons & Sons Pvt. Ltd; -vs- Union of India & Ors; reported in 1994 (2) CHN 131 where it is held: "41. A contention has been raised by Mr. Daw, learned Advocate for the respondents, that the petitioner should have replied to the show cause notice and submitted to the jurisdiction of the Customs authorities. If the petitioner is aggrieved by the decision of the Adjudicating Authority, the petitioner will be at liberty to move the appropriate forum. The contention of Mr. Dutt, learned Advocate on behalf of the petitioner is that had the reply to the impugned show cause notice been given, the Court would not have entertained the writ application and accordingly no reply was given. 42. I do not find any substance in the contentions raised by the learned Advocates a....