COLLECTOR OF CUSTOMS, CALCUTTA versus SANJAY CHANDIRAM

Citation: [1995] SUPP. 1 S.C.R. 19 · Decided: 05-05-1995 · Supreme Court of India · Bench: S.P. BHARUCHA · Disposal: Appeal(s) allowed
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Judgment (excerpt)

-, 
COLLECTOR OF CUSTOMS, CALCUTTA 
A 
v. 
SANJA Y CHANDIRAM 
MAY 5, 1995 
[S.P. BHARUCHA, SUHAS C. SEN AND K.S. PARIPOORNAN, JJ.] 
B 
> -
Customs Act, 1962--Section 14-Customs Valuation (Detennination of 
Price of Imported Goods) Rules, 1988-Rules 3 and 4-Transaction value-
Meaning of-Importer producing false certificate of country of origin-Trans-
action value cannot be the value declared by him in the invoice-Where C 
country of origin not proved held, transaction value would be price of same 
or similar goods in the course of intemational trade. 
The respondent is the proprietor of one M/s. Shiv Shankar Interna-
tional which imported zip rolls from a company in Singapore and 
41 
produced a copy of the country of origin certificate declaring the said D 
goods to be of North Korean origin. The goods were detained by the 
Directorate of Revenue Intelligence. On the basis of information that the 
importer was misdeclaring the country of origin and was under-invoicing 
the goods to evade payment or duty. A show cause notice was issued to the 
respondent and few others to this effect. 
E 
The Assistant Collector after hearing the parties held that the goods 
were not of North Korean origin and that the importer had produced a 
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forged certificate of country of origin. However, as the actual country of 
origin could not be proved, the Collector of Customs assessed the value of 
the goods at the South Korean price which was the lowest price at which F 
the goods were being generally purchased in the international trade. 
On appeal, the CEGAT confirmed the finding of the Assistant Col-
lector that goods were not imported from North Korea and that the 
country of origin certificate produced by the importer was not genuine. G 
However, on an interpretation of Rules 3 and 4 of the Customs Valuation 
(Determination of Price of Imported goods) Rules, the CEGAT held that 
as there was no evidence of contemporary imports of comparable goods at 
higher rates and for the fact that the importer had clandestinely remitted 
more than the amount actually paid, the transaction value of the goods 
under Rule 4 of the Customs Valuation (Determination of Price of Im- H 
19 
• 
20 
SUPREME COURT REPORTS [1995] SUPP. 1 S.C.R. 
A 
ported Goods) Rules would be the price declared by the importer. 
Hence the present appeal. 
Allowing the appeal, this Court 
B 
HELD : 1. Rules 3 and 4 of the Customs Valuation (Determination 
of Price of Imported Goods) Rules, 1988 could not be applied in the facts 
of this ca·se. These rules are based on the assumption that the price 
actually paid or payable for the imported goods has been genuinely dis· 
closed by the importer. But, if the certificates of origin of the goods have 
been found to be false, the value declared in invoices cannot be accepted 
C as genuine. The irresistible conclusion from the facts found in this case is 
that the real value of the imported goods has not been shown in the 
invoices. Therefore, the value of the imported goods, as declared by the 
importer cannot be taken as the transaction value. (25-G, 26-E, 27-D] 
D 
2. Once the CEGAT came to the finding that the goods were not . 
imported from DPR Korea, the only way to ascertain the value of the goods 
was to find out the price at which such or like goods are ordinarily sold 
or offered for sale in the course of international trade. This is precisely 
what the collector of Customs did in this case. (27-A] 
E 
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 5411 of 
F 
G 
H 
1990. 
From the Judgment and Order dated 11.10.90 of the Central Excise, 
Customs and Gold (Control) Appellate Tribuna~ New Delhi in Appeal No. 
CIA No. 1543/90/A) Order No. 1515/90-A). 
V.C. Mahajan and P. Parmeswaran for the Appellant. 
P.N. Misra for the Respondent. 
The Judgment of the Court was delivered by 
SEN, J. M/s. Shiv Shankar International, 69/10, 72 Canning Street, 
Calcutta, imported the following four consignments of Zip Rolls from 
Singapore and filed four Bills of Entry in the Customs House, Calcutta, as 
follows :-
(1) 8,00,000 yards of Zip Roll No. 5 'CF type per vessel John 
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COLLECTOR OF CUSTOMS v. S. CHANDIRAM [SEN, J.] 
21 
Everett, Rot No. 692/89, Line No. 196, declared C.I.F. value A 
Rs. 3,06,941.52 against B/E No. 236 dated 20.11.89. 
(2) 7,60,000 yards of Zip Roll No. 5 'CF' type per vessel John 
Everett, Rot No. 692/89, Line No. 197, declared C.I.F. value 
Rs. 2,91,594.44 against B/E No. 1237 dated 20.11.89. 
(3) 8,
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