Calcutta High Court
Atmaram Agarwalla vs Collector Of Customs on 28 March, 1991
Equivalent citations: 1992(60)ELT217(CAL)
Author: Ruma Pal
Bench: Ruma Pal
JUDGMENT Ruma Pal, J.
1. The petitioner has imported Polystyrene Resin General Purposes Lucky 15-NF (hereinafter referred to as - the said goods). The goods were imported pursuant to an order placed by the petitioner with a concern of Hongkong. The prices at which the said goods were purchased by the petitioner is claimed to be $ 1120 per MT. The goods were manufactured by Lucky Goldstar International Corporation, Seoul, Korea. The goods arrived in Calcutta on 16/17th February, 1991. On 15-2-1991 a bill of entry was filed in respect of the said goods. The bill of entry mentioned the said goods as Polystyrene Resin General Purposes Lucky 15-NF. The value of the said goods was stated as CIF $ 1120 per MT.
2. The Customs Authorities, however refused to release the said goods on the ground that the prices mentioned in the invoice was lower than the prevailing market price. The petitioner filed a writ application challenging the refusal of the Customs Authorities to accept the invoice value and also the refusal of the Customs Authorities to assess or release the goods. The said application was moved on 11-3-1991. An interim order was passed on 18-3-1991 to the effect inter alia that the Customs Authorities should assess the goods and pass an assessment order after hearing the petitioner.
3. An assessment order has been passed by the Customs Authorities in which the value of the said goods has been stated to be $ 1400 MT.
4. The Customs Authorities have justified the assessment order by referring to the computer print outs which contain brief descriptions of the nature of the goods and the value of the same.
5. The computer print out relating to the Bombay Customs House contains references to General Purpose Polystyrene, Gr. 15 N.F. The computer print out for Madras relates to Lucky's G.P.P.S. 15 N.F. Polystyrene. A distinction therefore seems to exist between General Purpose Polystyrene Gr. 15 N.F. and Lucky's G.P. Polystyrene 15 N.F. The rates specified in connection with Lucky's G.P.P.S. 15 NF. Polystyrene and the invoice dates in respect thereof are as follows:
DATE RATE 4-2-1991 ... 1,165 U.S. Dollars 17-12-1990 ... 1,400 8-12-1990 ... 1,400 " "
6. On the other hand the petitioners have produced Customs Print outs relating to Bombay, Calcutta and Madras. The entries in the print outs relating to Bombay are in connection with General Purpose Polystyrene resin of divers grades, including General Purpose Polystyrene 15 N.F. The Customs printout in connection with Calcutta relates to High Impact Polystyrene and General Purpose Polystyrene Gr. 2 G.33. The print out in respect of Madras Customs House relates to High Impact Polystyrene, Polystyrene Resin, Polystyrene Film and the same two instances of Lucky's G.P.P.S. 15 N.F. Polystyrene relied upon by the Customs Authorities. Therefore, if there is a difference between Lucky's G.P.P.S. 15 N.F. Polystyrene and other General Purpose Polystyrene Resins 15 N.F. except for the two instances which are common with the Customs print out, the petitioner has not been able to show any other instances of identical goods such as the petitioners being imported and released by the customs at the invoices value. However, this court is not in a position to determine at this stage whether there is a distinction in fact between Lucky's G.P.P.S. 15 N.F. Polystyrene and General Purpose Polystyrene Gr. 15 N.F.
7. The petitioners have also produced an invoice dated 30-10-1990 of Lucky Goldstar International Corporation in favour of M/s. Plastic Concern for General Purpose Polystyrene Grade 15-NF in which the price was $ 1120. It is not stated whether this was a direct sale or sale through a third party as in this case. A copy of the bill of entry relating to the said consignment of M/s. Plastic Concern has also been produced before this Court. It appears from the bill of entry that the invoice value of the goods in question was accepted for the purpose of assessment and release. The petitioner has also produced copies of the manufacturers invoices in favour of Dilip Plastics, Dipak Plastics Industries and H.S. Plastics. The invoices are all dated 28-10-1990 and are for Polystyrene Resin General Purpose Lucky 15 NF. The rates are all $ 1,120. There is no evidence that the Customs Authorities have cleared these goods at the invoice value. A certificate has also been given by Alwynco, the foreign seller to the effect that they have not received any consideration from M/s. Lucky Goldstar International in respect of the sale of Polystyrene Resin General Purposes Grade 15-NF from South Korea to Calcutta.
8. In this case the invoice is dated 28-12-1990.
9. The Customs Valuation (Determination of Prices of Imported Goods) Rules, 1988 (hereinafter referred as the Rules) which came into force on 6th August, 1988 provide for determination of the method of valuation of imported goods. Rule 3 provided that the value of imported goods shall be the transaction value. If the transaction value cannot be determined the value is required to be determined by proceeding sequentially through Rule 5 to 8 of the Rules.
10. Rule 2(f) provides that "transaction value" means the value determined in accordance with Rule 4 of these rules. Rule 4(1) provides that the transaction value of imported goods shall be the prices actually paid or payable for the goods when sold for imports to India adjusted in accordance with the provisions of Rule 9 of the Rules.
11. Rule 4(2) provides that the transaction value shall be accepted subject to certain exceptions which are not applicable in this case.
12. Rule 5 deals with the transaction value of identical goods. Rule 6 deals with transaction of similar goods. Rule 7 deals with deductive value and Rule 8 deals with the residual method.
13. Rule 9 provides that for determining the transaction value inter alia in adding various items on account of services such as commissions and brokerage actually paid or payable for the imported goods. In the assessment order it has been stated that the sale of the identical goods by the Korean manufacturers directly to the Madras Importer (Murugappa) was at $ 1400. It is further stated that it is unlikely that the sale in question which had been concluded through a third party viz. M/s. Alwynco would be for a lesser price. Although the writ petitioners have produced a certificate from M/s. Alwynco to the effect that they have not received any consideration from M/s. Lucky Goldstar International Corporation in respect of the deal the certificate does not state that no commission was receivable by M/s. Alwynco from the petitioners for concluding the deal. Therefore, it cannot be said with certainty at this stage whether the transaction value would be increased by any amount on account of any commission or brokerage paid or payable by the petitioner to M/s. Alwynco.
14. The customs officer appears to have applied Rule 5 by determining the value of imported goods on the basis of the value of identical goods sold for export to India. The question of the application of this method of valuation under Rule 5 arose because the Customs Authorities disputed that the prices actually paid or payable for the said goods was the value mentioned in the invoices.
15. Therefore in my view in this background and in this state of the facts interference with the assessment order under Article 226 is not justified. Therefore, I dispose of this writ petition by granting liberty to the writ petitioner to prefer an appeal from the assessment order. The petitioner will be at liberty to argue on all points including those taken in the writ petition. Liberty however is also given to the petitioners to clear the said goods upon furnishing a bank guarantee for the entire amount covering the difference between the admitted Customs duty and the Customs duty as assessed by the respondents.
16. If the writ petitioners furnish such bank guarantee the respondent authorities are directed to release the goods in question within 48 hours thereafter.
17. the Bank Guarantee will be in favour of the Collector of Customs, Calcutta and will be kept renewed pending and subject to the appeal which may be preferred by the petitioner. The Bank Guarantee will contain a clause to the effect that if the writ petitioner fails to keep the Bank Guarantee renewed, the Bank will forthwith deposit the amount covered by the Bank Guarantee with the Collector of Customs. If the writ petitioner is ultimately unsuccessful, the Customs authorities will be at liberty to encash the Bank Guarantee. The petitioner will also pay an amount on account of interest calculated at 18% per annum on the guaranteed amount to the Collector of Customs from the date of furnishing the Bank Guarantee till the encashment. If the petitioner is successful, the Bank Guarantee will stand discharged and the Customs Authorities will pay interest at 18% per annum on the guaranteed amount from the date of furnishing of the Bank Guarantee till discharge together with all Bank charges for furnishing and maintaining the Bank Guarantee to the petitioner. Alternatively, the petitioner will have the liberty to pay the entire difference between the admitted duty and the duty as assessed to the Customs Authorities and the Customs Authorities will refund the sum together with interest at 18% per annum if the writ petitioner is ultimately successful in the appeal.
18. This order disposes of the writ petition. As no affidavit in opposition has been used, it is recorded that the allegations contained in the writ petition are not admitted by the respondents. There will be no order as to costs.
All parties to act on a signed copy of the operative part of this Judgment and order on usual undertaking.