Customs, Excise and Gold Tribunal - Mumbai
Radhey Shyam Ratanlal vs Commissioner Of Customs on 8 July, 2000
Equivalent citations: 2000(121)ELT638(TRI-MUMBAI)
ORDER G.N. Srinivasan, Member (J)
1. This Appeal No. C/90-V/2000-Mum. has been filed against order and decision made in CAO No. 1/2000/CC/CAC/SSB dated 27-12-1999 by which order, ld. Commissioner of Customs (E.P.) Mumbai had loaded the assessment of "cloves" from US $ 750 PMT to US $ 1800 PMT.
2. The appellant filed Bills of Entry Nos. 1230 and 1285, dated 3-12-1999 for clearance of cloves of ZANZIBAR origin declaring CIF value as US $ 750 PMT. The supplies have been made by the supplier allegedly under contract No. 54136 dated 13-7-1998, which was entered into between importer and the supplier.
3. It would appear from the reading of the impugned order that the prices of cloves have substantially increased after May 199 (sic). The inquiry was made in relation to these bills of entry which are itemized in the order portion of the impugned order. The contention of the importer before the adjudicating authority was inter alia that the goods should be valued as per the transaction value only and it could not be loaded as proposal. The adjudicating authority and the impugned order had referred to various bills of entries emanating from countries like Sri Lanka, Indonesia, and Madagaskar. By the impugned order the ld. Commissioner had ordered assessment of cloves, as stated above, to be finalised at US $ 1800 PMT. Hence the present appeal.
4. We have heard Shri Habibulla Basha, Sr. Counsel along with S/Shri E.S. Govinda and Kamal Bulchandani, Advocates appeared for the appellants and Shri Deepak Kumar, Ld. SDR appeared for the department.
5. Shri Habibulla Basha, Sr. Counsel argued that the impugned order suffers from illegality. The Ld. Sr. Counsel argued that the evidence in support of loading at higher value was not supplied to the appellants. He therefore states that there is a failure of natural justice in this case. He further states that in international transactions the price may vary from one country to another country in respect of goods even though they may be similar. It all depends upon various factors in each case. He also stated that in the last sentence of the order portion which reads as under:-
"Duty and other charges as per law be assessed and collected on value ordered to be assessed as above".
This he says is wrong in law inasmuch as the quantification was not done by the lower authority. The quantification is a quasi-judicial function he argues. It is a part of the assessment proceedings to apply the law on the object to the facts of each case to come to the determination of the liability on the part of the importer to pay the import duty and other charges as per law. The determination portion as well as quantification is a very important function he further argues. The impugned order, stresses the Sr. Counsel's is vitiated by law the reliance on the Judgment of the Supreme Court in the case of Rajkumar Knitting Mills (P) Ltd. v. Collector of Customs, Bombay -1998 (98) E.L.T. 292 (S.C.) is wrong inasmuch as the facts in that case have to be viewed with the facts in this case as the facts in both cases are different. He further stresses the point in that case the decision was under erstwhile section 14 of the Customs Act, 1962. In 1988 the said section has undergone a sea change. Therefore if he had been given a chance he could have made the submissions before the adjudicating authority so that the authority could apply correct principle enunciated in various Judgments to the facts of this case. Ld. DR would argue that when the appellant himself relies on the value enshrined in contract which is of Indonesian origin for the supply of goods of Zanzibar origin which is strange. He further stated that even after provisions of the Section 14 of the Act as it then stood prior to 1988 and the provisions of amended Section 14 of the Act remain the same as the philosophy behind Section 14 of the Act, is otherwise remain the same. This is what the DR stressed.
4. We have considered the interesting rival submissions. The goods have arrived under six bills of entry some time in June, July, November and December, 1999. The contract under which more than 50% of the goods were supplied is dated 13-7-1998 (Exhibit "A" page 25). That mentions the commodity to be cloves F.A.Q. of Indonesian origin. The quantity is described about 1000 PMT's. The price is mentioned as US $ 750 PMT COF. The period of contract is stated as July 1998 to February 1999, the goods have been supplied from June 1999 to December 1999, the adjudicating authority in the impugned order at paragraph 8, 9 and 10 have held as follows :-
"I had also seen the Bs/E of contemporary period and find that in B/E No. 31.37 dated 8-7-99 Cloves of Indonesian origin have been assessed at US $ 1800 PMT in New Custom House, Mumbai. In B/E No. 29839 dated 11-12-99, Cloves of Sri Lankan origin have been assessed @ US $ 5,450 PMT in Chennai Custom House. In view of these Bs/E, I hold that the prevalent price of Cloves of Indonesian and Zanzibar origin is around US $ 1800 PMT. The CIF price of Madagaskar Cloves in "The Public Ledger" dated 22-11-99 is quoted at US $ 3500 PMT which shows that the prevailing International price of cloves is much higher than the declared value in these Bills of Entry. The contract price in this case is not acceptable due to the fact that the imports are against expired contract and contract is not backed by a Letter of Credit and hence price of such contract cannot be taken as import price when the international price of Cloves has substantially increased.
The order in this case was placed on 13-7-98 and goods are being imported after almost 11/2 year. The Hon'ble Supreme Court in case of Rajkumar Knitting Mills (P) Ltd. v. Commissioner of Customs, Bombay -1998 (98) E.L.T. 292 (S.C.) held that the date of contract in the said case is 1-12-87, shipment was made on 18-6-88 and date of arrival of goods is 6-7-88 and therefore contracted price shall not be accepted and contemporary price on the date of import shall be taken. The facts in this case are also almost same and hence on the basis of aforesaid judgment of Hon'ble Supreme Court assessment has to be done on the basis of contemporary imports and not on the basis of contracted price. Hon'ble CEGAT in case of Collector of Customs, Delhi v. Blue Star Enterprises -1996 (81) E.L.T. 287 (Tribunal) held that the statutory authority has a duty to cause enquiries to be made to find out whether there is international trade in the particular kind of goods imported and the price of such goods sold or offered for sale for delivery at the relevant time. The goods imported viz Cloves are traded in international market and the prices of cloves quoted in international journals which are much higher than the prices declared by M/s. Radhey Shyam Ratan Lal. In view of the aforesaid judgment of Hon'ble CEGAT, I am bound by law to assess the goods at the contemporary international prices and not at the price as per an expired contract not even backed by a Letter of Credit.
The prices quoted in the "The Public Ledger" dated 22-11-99 for cloves of Madagaskar origin are US $ 3500 PMT. The Cloves of Sri Lankan origin have been assessed @ US $ 4450 PMT by Chennai Custom House. However, New Custom House, Mumbai assessed cloves of Indonesian origin vide Bill of Entry No. 3137 dated 8-7-99 @ US $ 1800 PMT. There is no final assessment of cloves at the rate below US $ 1800 PMT in Mumbai Customs House in past 3 months. I, therefore order the cloves imported by M/s. Radhey Shyam Ratan Lal be assessed @ US $ 1800 PMT by taking the lowest rate accepted by Mumbai Customs House".
In the above portion we find there is no whisper as to whether any notice has been given to the importer nor there is any observation as to waiver of such notice by the importer if any.
7. Whenever any order is passed by the quasi-judicial authority which may be prejudicial to the importer then such an authority in terms of Section 124 of the Customs Act should give a notice unless it is waived by the importer. There does not appear to be any notice given in this case. The relevance of a price in respect of goods from Madagaskar origin and Sri Lankan origin have to be checked with the particulars relating to the present import. The present import are from Zanzibar origin, the prices mentioned Shri Lankan origin import is stated to be US $ 5450 PMT but the quantity has not been mentioned. Even in respect of Madagaskar origin it is not mentioned as to what is the effect of the quantity has not been discussed in the impugned order. The same has to be checked with all the particulars in respect of the import in question as well as the imports on which the department wants rely have to be compared at the same level of transaction. The level playing field as far as possible should be identical or similar. It is needless to mention that country of origin the comparable prices should be the same. The agricultural products have vicissitudes in terms of prices. The adjudicating authority should give notice of actions he proposal to do, in this case as to why the price or value declared to be transaction value cannot be accepted and show cause notice should be given or waived by the importer. Even if he waives the show cause notice it should be examined whether such a waiver should be applicable to the facts of the case in terms of Section 124 of the Customs Act. If the importer replies to the show cause notice, then he must be heard in person by the authority and thereafter decide the case by determining the correct valuation as well as determination of the duty and other charges as per law. Such valuation and determination of duty and charges should not be delegated to any other authority as has been the case in the impugned order. The assessment proceedings are quasi-judicial proceedings it cannot be delegated to any other authority including classification and finalisation of the assessment. The impugned order is set aside and the adjudicating authority is hereby directed to re-determine the assessment in accordance with law as per observations made in this appeal. Matter is remanded. The parties are free to place any evidence in respect of this case before the adjudicating authority after giving copies of the same to the other side.