COMMISSIONER OF CUSTOMS (GEN), MUMBAI versus ABDULLA KOYLOTH

Citation: [2010] 13 S.C.R. 280 · Decided: 29-10-2010 · Supreme Court of India · Bench: D.K. JAIN · Disposal: Appeal(s) allowed

Judgment (excerpt)

A 
B 
[2010] 13 (ADDL.) S.C.R. 280 
COMMISSIONER OF CUSTOMS (GEN), MUMBAI 
v. 
ABDULLA KOYLOTH 
(Civil Appeal No. 1608 of 2005) 
OCTOBER 29, 2010 
[D.K. JAIN AND T.S. THAKUR, JJ.] 
Customs Act, 1962: 
c 
Section 14(1) - Valuation of imported goods for purposes 
of assessment - Mis-declaration with respect to country of 
origin, quantity and value of imported items - However, 
Tribunal accepting the transaction value as declared by 
assessee - HELD: Price paid by an importer to the vendor 
0 
in the ordinary course of commerce is to be. taken the 
transaction value in the absence of any special 
circumstances indicated in s. 14(1) of the Act and 
particularized in Rule 4(2) of 1988 Rules - In the instant case, 
the assessee admitted that there was difference between the 
items declared and seized and that the value arrived at after 
E market inquiries was acceptable to him -
In the 
circumstances, the Tribunal failed to apply the procedure 
envisaged in s.14(1) of the Act read with 1988 Rules - Order 
of Tribunal set aside and matter remitted to it for 
consideration afresh - Customs Valuation (Determination of 
F Price of Imported Goods) Rules, 1988 - Rules 3(ii}, 4(2) and 
5 to 8. 
The proprietorship concern of the respondent 
imported a consignment of assorted consumer goods 
G like glass ware, hair dryers, gas filled cylinders and 
refrigerant-22 gas (R-22). The bill of entry for the said 
goods was filed on 3.5.2002. The goods were seized, as 
it was found that there was mis-declaration with respect 
to country of origin, quantity and value of imported items, 
H 
280 
COMMISSIONER OF CUSTOMS (GEN), MUMBAI v. 
281 
ABDULLA KOYLOTH 
and there was no actual user licence for import of R-22 
A 
gas filled cylinders. The Commissioner of Customs 
rejected the value declared by the respondent for the 
purpose of Section14 of the Customs Act, 1962 and held 
that the assessable value of the goods had to be 
determined under Rules 6-A and 7 of the Customs 
Valuation (Determination of Price of Imported Goods) 
Rules, 1988. The Commissioner confirmed the 
assessable value of the goods and the duty demand. 
Additionally, the goods were ordered to be confiscated 
under sections 111 (d) and (m) with the option of c 
redemption and payment of fine, and penalty was also 
imposed on the respondent. R-22 gas cylinders were 
confiscated absolutely u/s 111 (d) of the Act, in the 
absence of actual user licence. The Customs, Excise and 
Service Tax Appellate Tribunal confirmed the order as 
0 
regards R-22 gas cylinders, but in respect of the other 
items, it allowed the claim of the assessee. 
/ 
B 
In the instant appeal filed by the Revenue, it was 
contended for the appellant that as there was mis-
declaration in the bill of entry in relation to quantity, 
E 
country of origin and value of the goods, the transaction 
value had to be rejected in terms of Section 14(1) of the 
Act and Rule 4(2) of the 1988 Rules, and in the absence 
of contemporaneous imports of similar goods, Rule 7 of 
1988 Rules would apply. 
F 
Allowing the appeal, the Court 
HELD: 1.1 Both, Section14 (1) of the Customs Act, 
1962 (as it existed at the relevant time) and Rule 4 of the 
Customs Valuation (Determination of Price of Imported 
G 
Goods) Rules, 1988, provide that the price paid by an 
importer to the vendor in the ordinary course of 
commerce shall be taken to be the transaction value in 
the absence of any of the special circumstances indicated 
H 
282 
SUPREME COURT REPORTS [2010) 13 (ADDL.) S.C.R. 
A in Section 14(1) of the Act and particularized in Rule 4(2) 
of the 1988 Rules. Therefore, the Customs authorities are 
bound by the declaration of the importer unless on the 
basis of some contemporaneous evidence the Revenue 
is able to demonstrate that the invoice does not reflect 
8 the correct val.ue. It is only when the transaction value 
under Rule 4 is rejected, that by virtue of Rule 3(ii), the 
value shall be determined by proceeding sequentially 
through Rules 5 to 8 of the 1988 Rules. [para 15} [2"92-H; 
293-A-C] 
·c 
Commissioner of Customs, Mumbai Vs. J.D. Orgochem 
Limited 2008 (6) SCR 200 = (2008) 16 sec 576; and 
Commissioner of Customs, Calcutta Vs. South India 
Television (P) Ltd. 2007 (8) SCR 95 = (2007) 6 SCC 373; 
Commissioner of Customs, Mumbai Vs. Bureau Veritas & 
D Ors. 2005 (2) SCR 118 = 2005 (3) SCC 285; and Eicher 
Tractors Ltd., Haryana Vs. Commissioner of Customs, 
Mumbai 2000 (4) Suppl. SCR 597 = (2001) 1 sec 315 -
relied

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