TaxTMI 
TaxTMI 
TaxTMI 
2009 (2) TMI 40
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....ese goods were found to be mis-declared goods in terms of value and some were found mis-declared in terms of description, value and quality. In view of mis-declaration of goods in terms of description and value, the Customs Authority was of the view that these were liable to be confiscated and importer was liable for penal action. A show cause notice was sought to be given but the importer waived issuance of show cause notice and personal hearing. The Additional Commissioner of Customs, Kandla vide order in original dated 29.11.2000 rejected the invoice price as was found to be very low as compared to prevalent international market price and in view of misdeclaration of goods in terms of value and description, enhanced the value of the goods for the assessment purpose as set out in the order. The Additional Commissioner of Customs ordered confiscation of under-invoiced goods as well as goods mis-declared in description but gave an option to the importer to redeem the same by payment of fine. In his order, the Additional Commissioner of Customs, Kandla also imposed a personal penalty of Rs. 2,50,000/-on the importing firm and its directors. 3. The present appellants, instead of ass....
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....gazine like PLATT's Weekly Report, as the assessable value was unsustainable in law. The learned counsel referred to two more decisions of this Court viz., (1) Rabindra Chandra Paul v. Commissioner of Customs (Preventive) Shillong (2007) 3 SCC 93; (2) Commissioner of Customs, Calcutta v. South India Television (P) Ltd. (2007) 6 SCC 373 wherein Eicher Tractors has been followed. In challenging the Standing Order as invalid and ultra vires, the learned counsel submitted that no instructions could be issued as to how assessable value of imported goods should be determined and as to how a consignment of waste like floor sweepings should be classified. She placed reliance on Orient Paper Mills Ltd. v. Union of India, AIR 1970 SC 1498. 8. Before we advert to the impugned Standing Order, it would be appropriate to refer to few provisions of law, relevant for the purposes of the controversy raised in these appeals. 9. Section 14 of the Act provides for valuation of goods for purposes of assessment which reads thus:- Valuation of goods for purposes of assessment - (1) For the purposes of the Customs Tariff Act, 1975 (51 of 1975), or any other law for the time being in force whereunder a ....
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....customs as it may deem fit and such officers of customs and all the other persons employed in the execution of this Act shall observe and follow such orders, instructions and directions of the Board : Provided that no such orders, instructions or directions shall be issued - (a) so as to require any such officer of customs to make a particular assessment or to dispose of a particular case in a particular manner; or (b) so as to interfere with the discretion of the Commissioner of Customs (Appeals) in the exercise of his appellate functions.] 11. Section 156 of the Act empowers the Central Government to make rules consistent with the Act for carrying out its purposes. In exercise of the power conferred by Section 156 of the Act read with Section 22 of the General Clauses Act, 1896, the Central Government has made the rules called the Customs Valuation (Determination of Price of Imported Goods) Rules 1988 (for short 'Customs Valuation Rules'). Rule 2(f) defines inter alia transaction value, the value determined in accordance with Rule 4 of the Rules. Rule 3 and 4 of the Customs Valuation Rules read thus:- 3. Determination of the method of valuation- For the purposes of these rul....
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....dance with the provisions of Rule 9 of these rules and cost incurred by the seller in sales in which he and the buyer are not related; (c) substitute values shall not be established under the provisions of clause (b) of this sub-rule. 12. Section 14(1) of the Act prescribes a method for determination of the value of the goods. It is a deeming provision. By legal fiction incorporated in this Section, the value of the imported goods is the deemed price at which such or like goods are ordinarily sold, or offered for sale, for delivery at the time and place of importation in the course of international trade. The word 'ordinarily' in Section 14 (1) is a word of significance. The ordinary meaning of the word 'ordinarily' in Section 14(1) is 'non-exceptional' or 'usual'. It does not mean 'universally'. In the context of Section 14(1) for the purpose of 'valuation' of goods, however, by use of the word 'ordinarily', the indication is that the ordinary value of the goods, is what it would have in the course of international trade at the time of import. Section 14(1), thus, provides that the value has to be assessed on the basis of price attached to such or like goods ordinarily sol....
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....in what we have noticed above. As a matter of fact in Eicher Tractors, Padia Sales Corporation v. Collector of Customs (1993) Supp. 4 SCC 57, Basant Industries Nunhai, Agra v. Additional Collector of Customs, Bombay (1995) Supp 3 SCC 320 and Sharp Business Machines v. Collector of Customs (1991) 1 SCC 154; were found distinguishable as in these cases the rejection of transaction value was found justified being covered by special circumstances and/or mis-description of the imported goods to defraud revenue. 15. Rabindra Chandra Paul (supra) and South India Television (P) Ltd.,(supra) also recognize the legal position that transaction value can be rejected if invoice price is not found to be correct but it is for the Department to prove that the invoice price is incorrect. 16. Rule 11 of Customs Valuation Rules also provide that in case of dispute between importer and the officer of the Customs valuing the goods it shall be resolved consistent with the provisions contained in sub-section 1 of Section 14 of the Act. 17. It has to be kept in mind that once nature of goods has been mis-declared, the value declared on the imported goods becomes unacceptable. It does not in any way aff....
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....e impugned Standing Order purely as instructions or guidelines and not mandate or command for being obeyed in each individual case of assessment before them. The High Court further held that Standing Order is to be taken only as an assistance in exercise of the quasi-judicial power of determining value for the purpose of levying of customs duty. We agree with the view of the High Court. As a matter of fact, it is the case of the Department as well that the impugned Standing Order is not binding; it is just in the nature of guidelines to streamline the functioning of Customs Officers at various field formations. According to the Department, the impugned Standing Order was issued for the smooth functioning of assessment and examination work and to bring about uniformity in the work and it prescribes only pattern of assessment and in no way, interferes with the discretion of the Assessment Authority. In view of the categorical stand of the Department that the impugned Standing Order is just in the nature of guidelines and it does not in any way interfere with the discretion of officers, the impugned Standing Order has to be read and understood accordingly. 21. In so far as the ....