M/S. VARSHA PLASTICS PVT. LTD. & ANR. versus UNION OF INDIA & ORS.

Citation: [2009] 1 S.C.R. 896 · Decided: 05-02-2009 · Supreme Court of India · Bench: MARKANDEY KATJU · Disposal: Dismissed

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Judgment (excerpt)

[2009) 1 S.C.R. 896 
A 
M/S. VARSHA PLASTICS PVT. LTD. & ANR. 
~-
v. 
UNION OF INDIA & ORS. 
(Civil Appeal Nos. 835-836 of 2002) 
B 
FEBRUARY 5, 2009 
[MARKANDEY KAT JU AND R.M. LODHA, JJ.] 
Customs Act, 1962 - s. 151A - Standing Order No. 
7 493199 dated 3. 12. 99 issued by Chief Commissioner of 
c Customs - Giving guidelines and directions for determination 
of valuation of plastic items, in the light of international prices 
contained in foreign journals - Validity of - Held: Valid - The 
Standing Order is not binding and has to be taken only as 
an assistance in exercise of quasi judicial power of 
D determining value for the purpose of levy of customs duty -
It does not interfere with quasi-judicial function - Valuation of 
goods generally should be on the basis of customs valuation 
Rules and contemporaneous import - But if evidence as 
regards contemporaneous import not available, reference to 
E foreign journal to find out international price is not irrelevant 
- Customs Valuation (Determination of Price of Imported 
Goods) Rules, 1988 - r. 4. 
The question for consideration in the· present 
appeals was legality and validity of Standing Order No. 
" 
F 7493199 dated 3.12.1999 issued by Chief Commissioner 
of Customs, whereby detailed guidelines and directions 
had been given for determination of valuation of plastic 
items in the light of international prices contained in the 
foreign finance journals. The Order also contained 
G directions as to how classification of mixed material like 
floor sweeping should be made. 
Dismissing the appeals, the Court 
H 
896 
VARSHA PLASTICS PVT. LTD. & ANR. v. UNION OF 
897 
INDIA & ORS. 
~-
HELD: 1. The Standing Order No. 7493/99 dated A 
3.12.1999, in any manner does not interfere with the 
independent quasi-judicial function to be discharged in 
the assessment of duty by the Assessing Officer. The 
High Court rightly held that the Standing Order is to be 
taken only as an assistance in exercise of the quasi-
8 
judicial power of determining value for the purpose of 
...... 
levying of customs duty. As a matter of fact, it is the case 
of the Department as well that the Standing Order is not 
binding, it is just in the nature of guidelines to streamline 
the functioning of Customs Officers at various field c 
formations. According to the Department, the impugned 
Standing Order was issued for the smooth functioning of 
assessment and examination work and to bring about 
uniformity in the work and it prescribes only pattern of 
assessment and in no way, interferes with the discretion 
D 
.): 
of the Assessment Authority. In view of the categorical 
stand of the Department, the impugned Standing Order 
has to be read and understood accordingly. [Para 20) 
[909-D-H; 910-A] 
2. Once transaction value is rejected on valid 
E 
grounds, the Customs Authority has to proceed to 
determine the value of goods by following Customs 
Valuation Rules and on the basis of contemporaneous 
.i( 
import. However, in the absence of any. evidence with 
regard to contemporaneous import, reference to foreign 
F 
journals that may indicate the correct international price 
for the purposes of Section 14 of Customs Act, 1962, may 
not be irrelevant and reliance upon such journdl cannot 
be said to be altogether unreasonable. As to whether in 
a given case such foreign journal or for that matter G 
PLA TT's Price Report indicate correct international price 
~ 
of the concerned goods for the purpose of Section 14(1) 
would depend on facts of each case and that would be 
for the department to establish. [Para 21) [910-B-E] 
3. Paragraph 7 of the impugned Standing Order 
H 
898 
SUPREME COURT REPORTS 
(2009) 1 S.C.R. 
A which provide as to how classification of mixed waste 
~ 
material like floor sweeping should be made also has to 
be read only as guidelines to the Assessing Authority. 
The Assessing Authority in his quasi-judicial function has 
to take independent view in this regard as well. [Para 22] 
B [911-B] 
Eicher Tractors Ltd. Haryana vs. Commissioner of 
Customs, Mumbai 2001 (1) SCC 315; Rabindra Chandra 
... 
Paul vs. Commissioner of Customs (Preventive) Shillong 
c 2007 (3) SCC 93; Commissioner of Customs, Calcutta vs. 
South India Television (P) Ltd. 2007 (6) SCC 373; Orient 
Paper Mills Ltd. vs. Union of India AIR 1970 SC 1498; 
Collector of Customs, Bombay vs. Shibani Engineering 
Systems, Bombay 1996 (10) SCC 42; Padia Sales 
D 
Corporation vs. Collector of Customs 1993 Supp. 4 SCC 5

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