TaxTMI 
TaxTMI 
2000 (11) TMI 139
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....6 per piece. The appellant found the offer competitive and agreed to buy the bearings from the vendor at the price offered. An order was placed by the appellant on the vendor on 17th April, 1993. The bearings were shipped from Japan and arrived in India. The appellant filed the Bill of Entry on 3rd December, 1993 together with the invoice dated 6th October, 1993 with the Custom authorities. 2.The Assistant Commissioner of Customs was not satisfied that the value of the bearings as declared by the appellant was the value of the bearings for the purposes of levying customs duty. He issued a notice on 14th December, 1993 to the appellant. The appellant gave a detailed reply setting out the facts noted earlier. The Assistant Commissioner noted that the declared price was only 23% of the vendor's list price and was of the view that the 77 per cent discount allowed to the appellant by the vendor was not normal and could not be accepted for the purpose of determining the price of the bearings under Section 14 of the Customs Act, 1962 and Rule 4 of the Customs Valuation (Determination of Price of Imported Goods) Rules, 1988 (referred to briefly as the 'Rules'). The Assistant Commissione....
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....sh the market value of the imported goods, the respondent claimed that the onus had been discharged by proof of the vendor's price list. In support of this argument, the respondent relied on Sharp Business Machines Pvt. Ltd., Bangalore v. Collector of Customs, Bangalore - 1990 (49) E.L.T. 640 (S.C.) = 1991 (1) SCC 154. 6.Under the Act customs duty is chargeable on goods. According to Section 14(1) of the Act, the assessment of duty is to be made on the Value of the goods. The value may be fixed by the Central Government under Section 14(2). Where the value is not so fixed the value has to be determined under Section 14(1). The value, according to Section 14(1), shall be deemed to be the 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' necessarily implies the exclusion of "extraordinary" or "special" circumstances. This is clarified by the last phrase in Section 14 which describes an "ordinary" sale as one "where the seller or the buyer have no interest in the business of each other and the price is the sole consideration for the sale.............
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....e. 10.The respondent's submission is that the phrase "the transaction value" read in conjunction with the word "payable" in Rule 4(1) allows determination of the ordinary international value of the goods to be ascertained on the basis of data other than the price actually paid for the goods. This, according to the respondent, would be in keeping with the overriding effect of Section 14(1). We cannot agree. 11.It is true that the Rules are framed under Section 14(1A) and are subject to the conditions in Section 14(1). Rule 4 is in fact directly relatable to Section 14(1). Both Section 14(1) and Rule 4 provide that the price paid by an importer to the vendor in the ordinary course of commerce shall be taken to be the value in the absence of any of the special circumstances indicated in Section 14(1) and particularised in Rule 4(2). 12.Rule 4(1) speaks of the transaction value. Utilisation of the definite article indicates that what should be accepted as the value for the purpose of assessment to customs duty is the price actually paid for the particular transaction, unless of course the price is unacceptable for the reasons set out in Rule 4(2). "Payable" in the context of t....
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.... 1988 Rules when 'special considerations' on the basis of which a transaction was held not to be an ordinary sale in the course of international trade within the meaning of Section 14(1), had not been statutorily particularised. 17.As to what would constitute such "special consideration" has been considered in several decisions of this Court. For example, a special quotation for the importer singling him out from other importers in India was held to be a special consideration in Padia Sales Corporation v. Collector of Customs, Bombay (supra) justifying the rejection of price paid as the transaction value. On the other hand in Basant Industries v. Addl. Collector of Customs, Bombay - 1996 (81) E.L.T. 195 (S.C.), a special quotation for an "old and valued customer" was upheld as not being a special. 18.The decision in Sharp Business Machines Pvt. Ltd., relied upon by the respondent is another case where the transaction value was rejected. In that case, the importer had wrongly mis-described the imported goods and sought to defraud the Revenue by attempting to surreptitiously import items prohibited under the import policy. It was found that there was justification, in the circu....