Customs, Excise and Gold Tribunal - Delhi
Satya Prakash Agnihotri vs Collector Of Customs on 13 February, 1990
Equivalent citations: 1990ECR22(TRI.-DELHI), 1990(47)ELT614(TRI-DEL)
ORDER Harish Chander, Member (J)
1. Shri Satya Prakash Agnihotri, J-11/86, Rajouri Garden, New Delhi, has filed an appeal being aggrieved from the order passed by the Addl. Collector of Customs, Import Cargo, Gurgaon Road, New Delhi. Briefly the facts of the case are that the appellant is an Indian national settled in the United Kingdom and had imported one used Rolls Royce Silver Spur Car on 12th June, 1989 from M/s. Car Exchange (Guernsey) Ltd., Lower Colborne Road, St. Peter Port, Guernsey for £ 60,000.00. The said car was imported into India and the appellant filed a bill of entry No. 89/6748, dated 4th August, 1989 for the clearance of the car, and in support of the same had produced invoice from one M/s. Jack Barclay Ltd. wherein it was stated that the recommended price of the car was £ 73,081.00 and the net export price was £ 57,461.06 and the revenue authorities had obtained information from England to the effect that the recommended basic price of the car in question was £ 69,985.00 excluding all taxes that being the net export value and after allowing depreciation of 16% the price came down to £ 58,787.40. The importer had claimed that he had paid £ 60,000.00. The adjudicating authority had accepted the value of £ 60,000.00 and had ordered the addition of value of accessories like whitewall tyres along with freight, and had also imposed a penalty of Rs. 1,00,000.00. The Addl. Collector had further observed that the importer had under-valued the car by production of a document from M/s. Jack Barclay Ltd. where it was mentioned that the basic recommended price was £ 73,081.00, whereas the basic recommended price as per the record from the company was £ 87,189.64 and both were inclusive of all taxes. The invoice value given in the invoice by M/s. Jack Barclay Ltd. in which it was stated that the basic recommended price was £ 73,081.00. The adjudicating authority also did not accept the value in the bill of entry at £ 60,000.00 minus 4% depreciation.
2. Being aggrieved from the aforesaid order, the appellant has come in appeal before the Tribunal.
3. Shri M. Ganesan, the learned advocate, has appeared on behalf of the appellant. He has reiterated the facts. He has referred to the invoice from M/s. Car Exchange (Guernsey) Ltd. which appears on page 23 of the paper book where the value has been shown at £ 60,000.00. Shri Ganesan has pleaded that the appellant had imported Rolls Royce Silver Spur which was registered in August, 1988 and is 1988 model. He has also referred to the CCP which appears on page 26 of the paper book and the CCP is for Rs. 16,00,000.00. He has pleaded that in the bill of entry the appellant had given the correct description and had declared the correct value. In support of his argument, he has referred to a judgment of the Tribunal in the case of Prem Kumar v. Collector of Customs reported in 1989 (40) ELT 340 where the Tribunal had accepted the value of the car declared by the appellant. The appellant was not a businessman. Shri Ganesan has pleaded that the appellant had declared the value at Rs. 15,33,586.00, whereas the revenue has assessed the same at Rs. 15,91,915.00 and has referred to the bill of entry which appears on page 29 of the paper book. He has referred to the price list which appears on page 36 of the paper book. He has also referred to page 32 which is a photo copy of car magazine and the price has been mentioned at £ 73,081.00. He has pleaded that the rate of exchange was Rs. 100 for £ 3.8745. He has pleaded that the car was purchased by the original owner on 28th July, 1988 and has referred to page 25 of the paper book which is a photo copy of the car registration. He has pleaded that the car was registered on 1st August, 1988. He has pleaded that 16% depreciation was allowed by the department and the car was transferred to the appellant's name on 12th June, 1989. The appellant came to India on 19th July, 1989. He has also referred to another judgment of the Tribunal in the case of Shri H.C. Rai Choudhury v. Collector of Customs reported in 1989 (43) ELT 96 (Tribunal), where the Tribunal had held that the value declared by the appellant should be accepted on the ground that importer being an individual and not a businessman. He has also pleaded that there was no justification of the levy of penalty of Rs. 1,00,000.00. Alternatively, he has pleaded that the penalty is excessive.
4. Shri S. Krishnamurthy, the learned SDR who has appeared on behalf of the respondent, has relied on the order-in-original and pleaded that the value adopted by the revenue authorities was correct in law and there was justificiation for the levy of penalty. He has pleaded for the dismissal of the appeal.
5. Shri M. Ganesan, the learned advocate, pleaded for the waiver of the penalty and acceptance of the value declared by the appellant. He has also pleaded that value should be reduced by 15% as a trade discount in view of the earlier judgments of the Tribunal. During the course of arguments, Shri Ganesan had filed a calculation sheet on the basis of World Car Catalogue Price of Rolls Royce Silver Spur.
6. We have heard both the sides and have gone through the facts and circumstances of the case. The facts are not disputed. The appellant had imported Rolls Royce Silver Spur August, 1988 model car. The value of the car has to be taken in terms of Section 14(1)(a) of the Customs Act, 1962. Section 14(1)(a) of the Customs Act, 1962 is reproduced below :-
"14. Valuation of goods for purposes of assessment -
(1) For the purposes of the [Customs Tariff Act, 1975 (5 of 1975)], or any other law for the time being in force whereunder a duty of customs is chargeable on any goods by reference to their value the value of such goods shall be deemed to be -
(a) the price at which such or likego goods are ordinarily sold, or offered for sale, for delivery at the time and place of importation or exportation, as the case may be in the course of international trade, where the seller and the buyer have no interest in the business of each other and the price is the sole consideration for the sale or offer for sale:"
The appellant had declared the invoice value at £ 60,000.00 from Car Exchange (Guernsey) Ltd., Lower Colborne Road - St. Peter Port, Guernsey - C.I. The car was purchased by the original owner on 28th July, 1988 and was registered with the registering authority on 1st August, 1988. The invoice in favour of the appellant is dated 12th June, 1989. In the matter before us, it is not disputed that the invoice is of a second-hand car. The Tribunal has taken a constant view that the value of the car has to be assessed on the basis of World Car Catalogue Price of the same model less 15% discount. In the case of Prem Kumar v. Collector of Customs reported in 1989 (40) ELT 340, the Tribunal had taken the view that the valuation is to be based at the price at which the goods are ordinarily sold in the wholsale in the course of international trade and had ordered the assessment of the car on the basis of World Car Catalogue Price of the same model less 15% discount. Para No. 3 from the said judgment is reproduced below :-
"3. The appellant contended before us that the invoice price was not a discounted price. The learned representative of the department maintained, on the basis of his experience in the Customs department, that the invoice price to the export passengers (like the present appellant) was a discounted price. He, therefore, opposed the grant of any further discount to the appellant. However, he had no objection to the car being assessed at the manufacturer's price to wholesale dealers in the course of international trade. But there could be no further 15% discount on the already net wholesale price. 15% discount was given on the retailer's list price.
We have had the benefit of experience of dealing with a large number of cases of valuation and assessment of imported cars. It is well within our knowledge that the general practice of the Customs department is to base the valuation on the World Car Catalogue Price and give 15% discount thereon. The idea is to get at the price at which the like goods are ordinarily sold in wholesale in the course of international trade, as required by Section 14(1)(a) of the Customs Act, 1962. Resort is had to the individual invoice prices of the passengers only if the World Car Catalogue Price of the model is not available. We order that the same basis should be followed in the case of the present appellant also and his car re-assessed on the basis of the World Car Catalogue Price of the same model less 15% discount. On our asking, the appellant was not in a position to show us the World Car Catalogue Price but he maintained that the said price was available with the Customs House. In case the World Car Catalogue Price is not available with the Customs House, the customs may ascertain the manufacturer's net price to wholesale dealers in the course of international trade in any other manner. If this course is also not feasible, the assessment may be maintained at the appellant's invoice price. There is no question of granting the 15% discount on the individual export passengers' invoice price."
The Tribunal had followed the judgment in the case of B.J. Singh v. Collector of Customs reported in 1990 (45) ELT 474. Accordingly, we direct the revenue authorities to assess the car on the basis of the World Car Catalogue Price of the same model less 15% discount. The appellant had declared the value as per the value of the second-hand car invoice less 4% depreciation. This reflects the innocence of the appellants. There appears to be complete absence of the element of mens rea. We do not find any justification in the levy of penalty. The order imposing a penalty of Rs. 1,00,000.00 (Rs. one lakh only) is quashed. With these observations, the appeal is allowed. We further order that if the appellant had imported any accessory, the value of the same should be added for the purposes of assessable value. The revenue authorities are directed to give consequential effect to this order.