LexGARDEN SILK MILLS LTD. AND ANR. ETC. ETC. versus UNION OF INDIA AND ORS .
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,> GARDEN SILK MILLS LTD. AND ANR. ETC. ETC. A v. • UNION OF INDIA AND ORS . -~ SEPTEMBER 29, 1999 [B.N. KIRPAL, A.P. MISRA AND R.P. SETHI, JJ.] B Customs Act, 1962 : Ss.14(1)(a), 12, 29 to 34, 45 to 47, 2(23) and 2(27)-lmport of goods-Customs duty-Levy of-Assessable value of goods--J)etermi11atio11 c of-Import of goods under ClF contracts-Valuation of goods by customs authorities-Addition of landing charges to CIF value-;-Validity. of-held, ~ landing charges were rightly taken into consideration in determining the assessable value of goods-Price fU:ed by the parties under CIF. contracts cannot be accepted as final valuatioll-Determi11atio11 of value by Customs Authorities required-Onus to prove the inclusion of landing charges .in CIF D contract lies 011 the importer. Ss.14, 12, 29 to 34 and 45 to 47-lmport of goods-Valuation of-Duti- "' able eye11t-Comme11ceme11t of-Held, the dutiable event occurs after the goods reach the customs barriers and the bill of entry for home consumption I E is filed. ~~ Customs Tariff Act, 1975-S. 3(a)-(;onstitutional validity of-Held, not ultra vires the Co11stitution-co11stitution of India, 1950-Article 14. Words & Phrases : F "Delivery"-Meaning of in the context of S.14(l)(a) of the Customs Act, 1962. Appellant-Companies imported certain goods from abroad; The im- port transactions were in the nature of CIF contracts, i.e. price paid G included costs, insurance and freight charges. Customs Authorities, while .,... determining assessable value of goods added landing charges to the CIF price. Appellants unsuccessfully challenged before the High Court, the levy and addition of landing charges. In some of the appeals, High Court ... disallowed the claim for excluding packaging charges from customs duty _, in terms of a Notification. In one of the appeals, importer's claim for the H 295 296 SUPREME COURT REPORTS (1999] SUPP. 3 S.C.R. « A benefit of a Notification imposing lower countervailing duty on the goods imported was rejected. Hence the present appeals. On behalf of appellant-companies it was contended that the words ,, "for delivery at the time and place of importation" occurring in S. 14 of B the Act could only mean delivery on the date and the port of discharg~ and the price must, therefore, be an ordinarily available price at about the same time and place of discharge. It could not be a price anterior or posterior to the point of time when the goods arrived and therefore, landing charges which were levied after the delivery. of the goods could not be imposed; in view Qf S. 12 of the Act read with Ss. 2(23) and 2(27), c the import of goods into India would be completed when they enter the territorial waters of India and it is the value at that point of time which alone can be taken into consideration for the purposes of assessing the customs duty; in the case of CIF contracts it was the shipper who pays the landing charges and the Indian importer does not incur these expen- D ses in addition to what he has paid on the basis of the CIF contract. Therefore, landing charges which were already included in the CIF value of the goods as part of the freight and recovered by the Port Trust Authorities directly from the steamer agents cannot be charged again; the onus of proving that the transaction value does not represent the value for the purposes of S. 14 of the Act and that it must be loaded with any I E other elements such as landing charges, was on the Department. Dismissing the appeals, the Court HELD : 1.1. Landing charges were rightly taken into con~ideration F in determining the assessable value of the imported goods for the pur- poses of S. 14(l)(a) of the Customs Act, 1962. [311-F] 2. S.14(1) (a) of the Act clearly indicates that it is not the price stated in the CIF contract which alone is to be accepted as being the value of such goods for the purposes of S. 14 of the Act. S. 14 of the Act is a deeming G provision. The legislative intent is clear that the actual price of the imported goods, namely, the landing cost, cannot alone be regarded as the value for I the purpose of calculating the duty. lfit is held that the CIF price represents -- the value of the imported goods, then S. 14 would have been differently worded. It could, for instance, have easily been stated that the value of the imported goods would be the transaction value of the goods. The language of . H S.14 clearly indicates
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