TaxTMI 
TaxTMI 
1982 (2) TMI 68
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....alk of normal value but the value 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 Select Committee of Parliament in the notes on clauses while considering the question of valuation for customs purposes to be set out in the Customs Act, 1962 observed that the nomenclature "normal price" might cause some difficulty and therefore the word "normally" was dropped and the word "ordinarily" was brought in. The department while taking the stand that air transport has become a normal mode of transport for almost all kinds of goods including machinery obviously erred on facts inasmuch as the intention in introducing Section 14 in its present form in the Customs Act, 1962 was not to take the normal freight that could be incurred but the value that prevails ordinarily for such or like goods. The contention of the petitioners is that transport by sea for imported goods still remains the predominant mode of transport and that the increase in the air transport has to be looked at from that angle. Import by air still remains an insignificant fraction of the total volume and quantum of im....
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....of the goods. In the instant cases, sea freight for like goods imported at the material time or near about the material time is available, as has been submitted by the petitioners. 3. The Government have carefully considered the above contentions set forth and observe that the petitioners during the hearing have referred to the observation made by the Select Committee in order to establish their contention that there is a distinction between the words "normally" and "ordinarily". According to the petitioners, the word "ordinarily" has been inserted in Section 14 so as to suggest that ordinary means of transport should be taken into account in preference to the extraordinary ones, like importation of goods by air. Government observe that the valuation norm as set out by Section 14 of the Customs Act, 1962 is based on the positive concept of valuation which has its origin in ECAFE concept of valuation. Under positive concept, the dutiable value of imported goods is their actual sale price, if they are sold in specified conditions. In case the imported goods are not so sold, the dutiable value is the actual sale price of the like goods adjusted in accordance with the specified cond....
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....uch as airport or the dock or wider area that has been suggested by the petitioners by relying upon the decision of the Bombay High Court vide AIR 1936 Bombay 356, such as Bombay, Calcutta etc. The Bombay High Court's decision as referred to by the petitioners was in the context of the Sea Customs Act, 1878 and not obviously the Customs Act, 1962. In terms of clause (a) of Section 30 of the Sea Customs Act, 1878, the wholesale cash price less trade discount for which goods of the like kind and quality were sold or were capable of being sold at the time and place of importation, without any abatement or deduction whatsoever, provided in clause (b) of Section 30, was to be accepted as value for assessment purposes. What was material for valuation purposes in terms of the said section under the Sea Customs Act was the wholesale cash price prevailing at the place of importation. Obviously in the aforesaid context, the place of importation would suggest a wider area than the actual point of landing such as airport or the dock for the simple reason that there may not be any wholesale market at the point of landing. In view of the above, the ratio of the aforesaid judicial pronouncement c....
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....rt or airport to which the goods are consigned or at which they are discharged from the ship or the aircraft for on-carriage to their destination. As a matter of fact, almost all the European and American countries who have subscribed to Brussels concept of valuation take the "place of introduction" as the point of landing only, such as airport or the dock. In view of the above international practice that can be taken as well-established by now, the place of importation for the purpose of Section 14 can be taken as the point of landing, viz., airport or the dock. As such, in terms of Section 14, the test for valuation purposes should be what is the selling price for the goods for delivery at the time and place of importation, that is, the point of landing. In respect of the goods that have been imported by air, the question that would be relevant is whether the cif value at which the goods have been sold is acceptable in the first instance. If not, the customs officers should examine as to what should be the price at which such goods are offered for sale for delivery at the time and place viz. the airport concerned, where the goods landed. Going by the above test, it cannot be sugg....