MIS. SIDDACHALAM EXPORTS PRIVATE LTD. versus COMMISSIONER OF CENTRAL EXCISE DELHI-ILL

Citation: [2011] 4 S.C.R. 695 · Decided: 01-04-2011 · Supreme Court of India · Bench: D.K. JAIN · Disposal: Appeal(s) allowed
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Judgment (excerpt)

• 
(2011] 4 S.C.R. 695 
MIS. SIDDACHALAM EXPORTS PRIVATE LTD. 
A 
v. 
COMMISSIONER OF CENTRAL EXCISE DELHI-Ill 
(Civil Appeal No. 810 of 2007) 
APRIL 1, 2011 
[D.K. JAIN AND H.L. DATTU, JJ.] 
B 
Customs Valuation (Determination of Price of Imported 
Goods) Rules, 1988: rr. 4 to 8 -
Valuation of goods -
Allegation that value of goods entered for exportation was C 
wrongly declared and thereby undue drawback amounts 
claimed by exporter - Department sought for market opinion 
regarding the value of goods -
Held: The procedure 
prescribed u/s. 14(1) of Customs Act and particularized in r.4 
has to be adopted to determine the value or goods entered D 
for exports - Ordinarily, the price received by the exporter in 
the ordinary course of business is to be taken to be 
transaction value for determination of Value of goods under 
export, in absence of any special circumstances indicated ul · 
s. 14(1) and r 4(2) -
The initial burden to establish that the 
E 
value mentioned by the exporter in the bill of export or the 
shipping bill, as the case may be, is incorrect, lies on the 
Department - Therefore, once the transaction value ulr.4 is 
rejected, the value must be determined by sequentially 
proceeding through rr 5 to 8- In the instant case, neither the 
F 
adjudicating authority nor the CESTAT dealt with the matter 
as per the procedure prescribed under the Act - At the 
threshold, instead of first determining the value of the goods 
on the basis of contemporaneous exports of identical goods, 
the Department erroneously resorted to a market enquiry ""." 
Matter remitted to adjudicating authority for consideration G 
afresh - Customs Act, 1962 - ss. 14(1 }, and 114. 
Customs Act, 1962: s. 130E(b) -Scope of - Discussed. 
695 
H 
696 
SUPREME COURT REPORTS 
[2011] 4 s c R. 
A 
The case of Revenue was that the appellant-exporter 
misdeclared the value of goods entered for exportation 
and claimed undue drawback amounts. The authorities 
drew samples of the goods and forwarded the same to 
one Mis. Skipper for their opinion regarding their market 
B value. On 12.3.2003, one 'P' claiming to be an authorized 
representative of M/s. Skipper submitted the valuation 
letter opining that the goods in question were export 
surplus and export rejected garments having poor quality 
of fabric and market value of said goods ranged between 
c Rs.40 to Rs. 70 per piece. Based on the said report, the 
custom authorities arrived at the total value of the 
consignments and the admissible drawback of Rs. 
3,56,328 as against the claim of Rs. 49,57,536. The 
appellant was issued a notice to show cause as to why 
0 
the drawback amount should not be reduced/disallowed 
and penalty under Section 114 of the Customs Act be not 
imposed on it. On 7.12.2004, 'P', the authorized signatory 
of M/s. Skipper submitted another letter to the 
Commissioner (Adjudication Bench) stating that their 
earlier letter dated 12.3.2003 should not be relied upon for 
E any purpose in as much as the same was prepared by 
the Customs authorities, and he was merely asked to 
transcribe his signature on the same. It was further stated 
that he was neither shown any goods nor any 
documents. On 14.12.2004, the exporter replied to the 
F show cause notice denying all the allegations contained 
therein. The exporter also questioned the authenticity of 
the report dated 12.3.2003 submitted by Mis Skipper. The 
Commissioner dropped the proceedings against the 
exporter, and allowed the drawback as claimed by the 
G exporter. The CESTAT allowed the appeal of Revenue 
and also levied a penalty of Rs.5 lakh each on the exporter 
and its Director respectively. The instant appeal was filed 
_challenging the order of the CESTAT. 
H 
• 
SIDDACHALAM EXPORTS PVT LTD. v. COMMNR. 697 
OF CENTRAL EXCISE DELHI-II 
Allowing the appeal and remitting the matter to the A 
adjudicating authority, the Court 
HELD: 1. It is trite law that the amplitude of an appeal 
under Section 130E(b) of the Customs Act, in relation to 
the rate of duty of customs or to the value of goods for 8 
the purposes of assessment, is very wide but it is equally 
well settled that where the CESTAT, a fact finding 
authority, has arrived at a finding by taking into 
consideration all material and relevant facts and has 
applied correct legal principles, the Supreme Court would C 
be loathe to interfere with such a finding even when 
another view might be possible on same set of facts. 
Nevertheless, if it is shown t
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