LexCOMMISSIONER OF CUSTOMS, CALCUTTA versus SOUTH INDIA TELEVISION (P) LTD.
Open in Lexace · Ask the AI about this caseJudgment (excerpt)
96
SUPREME COURT REPORTS
(2007] 8 S.C.R.
A Imported goods did not represent the transaction value under Rule 4 of the
Customs Valuation (Determination of Price of Imported Goods) Rules, 1988
("Customs Valuation Rules") as the price actually paid appeared to be
different than the declared price and that the Importer had under-Invoiced
the value of the goods to evade huge amount of the Government's revenue.
The Importer was asked to show cause as to why the value of the consignments
B In question should not be enhanced based on the export declaration under Rule
8 of the Customs Valuation Rules made by the Foreign Supplier. Accordingly,
a demand was raised for the differential duty of Rs. 28104,831.40 and fine In
lieu of confiscation. Rejecting the contentions of the assessee, the demand of
differential amount of duty was confirmed by the Revenue. Aggrieved by the
C order of the authorities, the assessee flied an appeal before the Customs,
Excise and Gold (Control) Appellate Tribunal (CEGA T), which was allowed by
the Tribunal. Hence the present appeal filed by the Revenue and the connected
appeals filed by the assessees.
D
Dismissing the appeals, the Court
HELD: 1.1. Value is derived from the price. Value is the function of the
price. This is the conceptual meaning ofvalue. Under Section 2(41), "value"
Is defined to mean value determined.in accordance with Section 14(1) of the
Act. Silction 14 of the Customs Act, 1962 Is the sole repository ·of law·
gov,ernlng valuation of goods. The Customs Valuation Rules, 1988 have been
E framed only in respect of imported goods. There are no rules governing the
valuation of export goods. That must be done based on Section 14 itself.
f Para 61 (103-H; 104·AI
1.2. The Revenue hH charged the respondent-Importer alleging mis·
F declaration regarding the price. There Is no allesatlon of mis-declaration In
the context of the description of the goods. The allegation Is ofunder-lnvolclng.
~
The charse of under-lnvolcln1 has to be supported by evidence of prlce11 of
t'
contemporaneous Imports of like 1oods. It Is for the Revenue to prove that
,,,
the apparent Is not the real. (Para 611104-B, CJ
G
1.3. On a plain reading of Section 14(1) and Section 14(1A) of the Act,
It envisages that the value of any goods chargeable to ad valorem duty has to
be deemed prici: as referred to In Section 14(1). Therefore, determination of
such price has to be In accordance with the relevant rules and subject to the ..
•1'\-
provlslons of Section 14(1). It Is made clear that Section 14(1) and Section
H 14(1A) are not mutually exclusive. Therefore, the transaction value under
Rule 4 of the Rules must be the price paid or payable on such goods at the
COMMNll. OF CUSTOMS, CALCUTTA~. SOUTH INDIA TELEVISION (P) LTD.
97
time and place or Importation In the course or International trade. Section 14 A
Is the deemlna provision. It talks or deemed value. The value Is deemed to be
the price at which such goods are ordinarily sold or offered for sale, for
delivery at the time and place of Importation In the course of International
trade where the seller and the buyer have no interest In the business of each
other and the price Is the sole consideration for the sale or for offer for sale. B
Therefore, what has to be seen by the Revenue ls the value or cost of the
Imported goods at the time of Importation, the invoice price Is not sacrosanct.
However, before rejecting the invoice price Revenue has to alve cogent reasons
for such rejection. This is because the invoice price forms the basis of the
transaction value. Therefore, before rejecting the transaction value as
Incorrect or unacceptable, Revenue has to find out JVhether there are any C
Imports or Identical aoods or similar goods at a hlaher price at around the
same time. Unless the evidence Is aathered In that reaard, the question of
Importing Section 14(1A) does not arise. In the absence of such evidence,
Invoice price has to be accepted as the transaction value. Invoice Is the evidence
ofvalue. Casting suspicion on invoice produced by the importer is not sufficient D
to reject It as evidence ofvalue of Imported goods. (Para 61
1.4. lfthe Revenue relies on declaration made in the exporting country,
It has to show how such declaration was procured. It Is clarified that strict
rules of evidence do not apply to adjudication proceedings.
(Para 6) (105-B( E
1.5. Once the Revenue discharges its burden of proExcerpt shown. Read the full judgment & AI analysis in Lexace.