M/S. GIRA ENTERPRISES AND ANR. versus COMMISSIONER OF CUSTOMS, AHMEDABAD

Citation: [2014] 14 S.C.R. 727 · Decided: 21-08-2014 · Supreme Court of India · Bench: JASTI CHELAMESWAR, A.K. SIKRI · Disposal: Appeal(s) allowed
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Judgment (excerpt)

(2014] 14 S.C.R. 727 
M/S. GIRAENTERPRISESANDANR. 
v. 
COMMISSIONER OF CUSTOMS, AHMEDABAD 
(Civil Appeal Nos. 433-434 of 2004) 
AUGUST 21, 2014 
[ J. CHELAMESWAR AND A. K. SIKRI, JJ.] 
Customs Valuation (Determination of Price of Imported 
Goods) Rules, 1988-Rules 4 and 5-determination of value 
A 
B 
of imported goods - Import of consignments by assessee -
C 
Value thereof declared by the assessee as US $5001- PMT 
- On verification, the chemical name of the imported goods 
was found to be 'Cyanuric Chloride' as known in the 
International market- The Revenue, relying on a computer 
printout, assessed the value of the imported goods at US $ 0 
1860/PMT by resorting to rule 5- Demand of differential duty 
-Propriety of-Held: In a given case, ifthe Revenue notices 
identical goods have been imported by other importers in 
comparable transactions at a different rate (normally higher 
rate) then Revenue is enabled by Rules 5 to reject the 
valuation made by the importer and determine the ''price E 
actually paid or payable" by the importer - In the present 
case, in absence of any material produced by Revenue in 
proof of the alleged comparable imports at a higher value, 
the assessment order is not sustainable -Alleged computer 
print-out is not proof of existence of comparable imports -
F 
Even if contents of the print-out are assumed to be true, a 
reasonable opportunity is required to be given to ascertain· 
whether the transaction evidenced by computer print-out are 
comparable to the transaction of the appellant. 
G 
Words and Phrases - 'Transaction value' - Meaning 
of, in the context of customs valuation. 
CIVILAPPELLATE JURISDICTION: Civil Appeal Nos. 
433-434 of2006. 
727 
H 
728 
SUPREME COURT REPORTS 
[2014] 14 S.C.R. 
I 
A 
From the judgment and order dated 23.08.2005 passed 
by the Customs, Excise and:§wvice Tax Appellate Tribunal, 
West Zonal Bench at Mumbaiih Appeal No. C/791 & 792/03-
Mum. 
S. K. Bagaria, Sr. Adv., Sonu Bhatnagar, K. Ajit Singh, 
B 
Srinivas Vijay Kumar, Udit Jain and Praveen Kumar, Advs. for 
the Appellants. 
K. Radhakrishnan, Sr.Adv., K. Swami, Ms. Sunita Rani 
Singh and B. Krishna Prasad,Advs. forthe Respondent. 
c 
The following Order of the Court was passed : 
ORDER 
1. These are statutory appeals filed under Section 
130(E) of the Customs Act, 1962 from the judgment and order 
dated 23.8.2005, passed by the Customs, Excise and Service 
D Tax Appellate Tribunal, West Zonal Bench at Mumbai in Appeal 
No. C/791 & 792/03/Mum. 
2. The appellants imported two consignments of"2-4-6 
Tricloro 1-3-5 Triazine"aggregating 74.10 MT from China under. 
E two Bills of Entry, the cost of which is declared by the appellants 
to be SG $ 750/- PMT equivalent to US$ 5001- PMT. The goods 
were provisionally assessed and allowed clearance on 
17.9.1994. 
3. Subsequently, a show cause notice dated 25.9.2000 
F came to be issued to the appellants by the Commissioner of 
Customs, Gujarat atAhmedabad calling upon the appellants 
to show cause why certain action indicated therein cannot be 
taken against the appellants. The relevant portion of the show 
cause notice is as follows:-
G 
"Therefore, Mis. Gira Enterprises, Ahmedabad are 
hereby called upon to show cause to the Commissioner 
of Customs, Ahmedabad as to why: 
(I) the provisionally assessed Bills of Entry (as per 
Annexure 'Pl) should not be finalised after taking in value 
H 
ofUS$1860.00PMTCIF. 
MIS. GIRAENTERPRISESANDANR. v. COMMISSIONER 
729 
OF CUSTOMS, AHMEDABAD 
(iO The differential dufy of Rs. 31,53,833/-(as per Annexure A 
'A') should not be recovered under Section 18(2) read 
with Section 28(2) of the Customs Act, 1962. 
(iii) The ·goods which are liable for confiscation under 
Section 111(m) of the Customs Act, 1962 should not be 
confiscated and why fine in lieu of confiscation should 
B 
not be imposed as goods has already been cleared 
provisionally against Bond for test and value verification. 
(iv) Penalty should not be imposed on M/s. Gira 
Enterprises, Ahmedabad under Section 114A/112(a) of C 
the Customs Act, 1962 . 
. (v) Interest under Section 28AB of the Customs Act, 1962 
should not be recovered." 
4. It is also stated in the show cause notice that the goods 
imported by the appellants were subjected to a test in the D 
Central Excise & Customs Laboratory, Baroda. According to 
the show cause notice, the chemical name of the goods was 
verified and it was found to be "Cyanuric Chloride" as known 
in the International market.
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