COMMISSIONER OF CUSTOMS, MUMBAI versus M/S. BUREAU VERITAS AND ORS.

Citation: [2005] 2 S.C.R. 118 · Decided: 14-02-2005 · Supreme Court of India · Bench: RUMA PAL · Disposal: Dismissed

Judgment (excerpt)

A 
B 
c 
COMMISSIONER OF CUSTOMS, MUMBAI 
v. 
M/S. BUREAU VERITAS AND ORS. 
FEBRUARY 14, 2005 
[RUMA PAL, ARIJIT PASAYAT AND C.K. THAKKER, JJ.] 
Customs Act, 1962-Customs Valuation Determination of Price of 
Imported Goods Rules, 1988 : 
Rule 4-Transaction value of goods under~Determination of-Import 
of oil rigs-Price declared, for payment of duty-Non-acceptance of price 
paid by importer as value under - declared-Levy of duty and penalty-
Tribunal on basis of various materials held variation in price of rigs due to 
fluctuations in prices as such declared price to be transaction value in terms 
D of Rule 4 and set aside duty and penalty levied-On appeal, held: Material 
referred by Tribunal relevant-Authenticity, credibility or reliability of· 
documents not questioned-Hence, order of Tribunal not perverse or irrational 
and calls for no interference-Constitution of Jndi~Articl'e 136. 
Rule 4-Transaction value of goods under-Determination of-Held: It 
E is the price actually paid for the particular transaction unless price is 
unacceptable under Rule 4(2)-Use of definite article 'the' indicates value 
accepted for assessment to custom duty- 'Payable' in context of Rule 4(1) is 
to be read as referring to 'the particular transaction' and payability in respect 
of the transaction envisages a situation where payment of price may be 
deferred-Rules 5 to 8 prov/de for alternate modes of valuation, when 
F transaction value under Rule 4 is rejected-Rules 5 to 8 and 3-/nterpretation 
of Statutes. 
Practice and Procedure : 
Tribunal recorded agreement between parties on a point-Plea before 
G Supreme Court by one of the parties taking different stand-Held: If there was 
wrong recording by Tribunal, aggrieved party should approach the Tribunal 
and not the Supreme Court. 
Words and Phrases: 
H 
118 
COMMR. OF CUSTOMS v. BUREAU VERITAS 
119 
'Payable '-Meaning of in the context of Rule 4(1) of the Customs A 
Valuation Determination of Price of lmp~rted Good{ ~1/es, 1988. 
; ; 
'' 
Respondent no. 2 in Civil Appeal Nos. 808r810 of 2004 and sole 
respondent in Civil Appeal No. 811 of 2004-assessee imported rig from a 
foreign company to bring it to India for fulfillment of the contract with 
ONGC. It declared the value of the rig for clearance on payment of duty. B 
Manager of assessee's company and respondent No. 1 in C.A. Nos. 808-
810 of 2004-a marine inspecting agency certified the value of rig as the 
price paid by assessee-importer to the foreign company, the seller. Revenue 
found that the value of price was under declared and issued show cause 
notice to the assessee. Ultimately Revenue found that the transaction value C 
of the rigs in terms of Rules 4 of the Customs Valuation Determination of 
Price of Imported Goods Rules, 1988 was the price paid for its purchase 
but did not accept the declared value on the ground that the buyer-assessee 
and the seller-foreign company were related parties both being subsidiary 
of the same company and the seller had purchased the oil rig in its previous 
sale at a price which was twice the price paid by assessee-importer and D.' 
levied penalty and interest. Appeals were filed. Tribunal recorded that 
both the assessee and Revenue agreed that the declared price is the 
transaction value and relying on data of various publications and journals 
and the report of the valuation expert, held that there were fluctuations 
in prices of rig and as such the declared price would be the transactional E 
value in terms of Rule 4. It allowed the appeal and set aside the duty and 
penalty levied. Hence the present appeal. 
Appellant-Revenue contended that the Tribunal merely relying on 
the data available and the report of the valuation expert, could not have 
held that the value disclosed was the market value; that Rule 4 has .F 
application only when the transaction leads to import; and that the 
Tribunal proceeded on the basis as if the Revenue accepted that the price 
disclosed was the transaction value. 
Respondent-assessee contended that the Tribunal arrived at the view 
after taking into consideration all relevant aspects and the correct position G 
in law; and that right from the stage of show cause notice Revenue's stand 
was that the price indicated was the transaction value. 
Dismissing the appeals, the Court 
H 
120 
SUPREME COURT REPORTS 
(2005] 2 S.C.R. 
A 
HELD : I. The Tribunal kept various requirements of the Customs 
Valuation Determination of Price of Imported Goods Rules, 19

Excerpt shown. Read the full judgment & AI analysis in Lexace.