COMMISSIONER OF CUSTOMS (IMPORTS), MUMBAI versus M/S GANPATI OVERSEAS THROUGH ITS PROPRIETOR SHRI YASHPAL SHARMA & ANR.

Citation: [2023] 13 S.C.R. 172 · Decided: 06-10-2023 · Supreme Court of India · Bench: B.V. NAGARATHNA · Disposal: Dismissed

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Judgment (excerpt)

[2023] 13 S.C.R. 172 : 2023 INSC 881
172
CASE DETAILS
COMMISSIONER OF CUSTOMS (IMPORTS), MUMBAI
v.
M/S GANPATI OVERSEAS THROUGH ITS PROPRIETOR SHRI 
YASHPAL SHARMA & ANR.
(Civil Appeal Nos. 4735-4736 of 2009)
OCTOBER 06, 2023
[B. V. NAGARATHNA AND UJJAL BHUYAN, JJ.]
HEADNOTES
Issue for consideration: Whether the tribunal was justifi ed in holding 
that enhancement of value of the imported goods and the penalties imposed 
by the Commissioner of Customs on the noticee-respondents could not be 
sustained and consequently in setting aside the same.
Customs Act, 1962 – 14 – Customs Valuation (Determination of 
Price of Imported Goods) Rules, 1988 – r. 4, 8, 5, 6 and 7 – Transaction 
value of imported goods – Determination of – Allegations of under-
invoicing of price and thereby evasion of customs duty by the 
respondents – Initiation of proceedings on the basis of the price declared 
by the foreign supplier in the fi rst set of export declarations fi led before 
the Hong Kong customs authority – Discrepancies noticed in the price 
mentioned in the export declarations and the price of the goods as per 
the import invoices – Filing of second set of export declarations albeit 
imposition of penalty for mis-declaration of price at the initial stage, 
which stood paid by the foreign supplier – Department after rejecting 
the price declared as per the import invoices, invoked r. 8 straightaway 
instead of going through rr. 5, 6 and 7 thereof sequentially – Correctness:
Held: If transaction value of imported goods cannot be determined, 
the value shall be determined by proceeding sequentially through rr. 5 to 
8 – Where the value of imported goods cannot be determined under the 
provisions of any of the rr 5 to 7A, the value shall be determined using 
reasonable means as provided in r. 8-the residual method – Furthermore, 
transaction value can be rejected if the invoice price is not found to be correct 
173
but it is for the department to prove that the invoice price is incorrect – On 
facts, both the department as well as the adjudicating authority were not 
justifi ed in rejecting the import invoice price of the goods as not correct 
and enhancing the price by straightaway invoking r. 8 when there was no 
evidence before them to do so – Thus, the tribunal was justifi ed in setting 
aside the order passed by the adjudicating authority – No error or infi rmity 
in the impugned judgment of passed by the tribunal. [Paras 34.1, 37, 40.2, 
41,42]
Customs Act, 1962 – Initiation of proceeding alleging under-
invoicing of price of goods imported from foreign country and thereby 
evading customs duty by the noticee – Reliance upon the unattested 
photocopies of the fi rst set of export declarations fi led by the foreign 
supplier before the customs authority showing great discrepancy in the 
price mentioned in the export declarations and the price of the goods 
as per the import invoices – Justifi cation:
Held: Export declarations relied upon by the Department and earlier 
by the Directorate of Revenue Intelligence were unattested photocopies 
– Since those documents were used as a piece of evidence against the 
noticee, it was necessary that those documents were required to have been 
proved – Unattested photocopies of the relied upon documents without 
anyone proving or owning up the veracity of the same would not have any 
evidentiary value – Very substratum of these documents was subsequently 
removed when the foreign supplier fi led a second set of export declarations 
before the Hong Kong customs authority showing lower price matching 
the price of the goods declared in the import invoices – Foreign supplier 
had paid the penalty for mis declaration of price at the initial stage – There 
can be no justifi able reason for the department to harp upon the price of 
the goods as per the initial export declarations by placing reliance on the 
unattested photocopies of the fi rst set of export declarations to prove under-
invoicing for the purpose of evading customs duty – Tribunal rightly held 
that the value shown in the fi rst set of export declarations could not form 
any reliable basis for enhancement of the value. [Paras 16, 17]
Customs Act, 1962 – s. 108 – Power to summon persons to give 
evidence and produce documents – Admissibility in evidence of the 
statement recorded u/s. 108:
COMMISSIONER OF CUSTOMS (IMPORTS), MUMBAI v. M/S GANPATI 
OVERSEAS THR. ITS PROP. SHRI YASHPAL SHARMA 
SUPREME COURT REPORTS 
[2023] 13 S.C.R.
174
Held: Customs

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