Rajkumar Knitting Mills (P) Ltd. vs Collector Of Customs, Bombay on 14 January, 1998
It is not the case of the appellants that the impugned goods are akin to the kind of goods dealt in the case of Eicher Tractors (supra) where 77% discount was allowed by the manufacturer on one time sale of five years old stock.... Moreover, the decision of the three Member Bench of the Hon'ble Supreme Court in the case of Rajkumar Knitting Mills (supra) interpreting Section 14(1) of the Customs Act, 1962 is binding on us in view of the fact that the relevant words of Section 14(1) have not undergone any change and there is no contrary decision of any Larger Bench of the Hon'ble Supreme Court. Section 14(1) of the Customs Act, 1962 requires customs valuation to correspond to ordinary competitive price in international trade. Transaction value method is one of the methods of valuation under the Customs Valuation Rules, 1988. The transaction value has been defined to be the actual price paid or payable. The declared value may not represent the transaction value in every case. When the declared value is ridiculously low compared to the ordinary competitive price of comparable goods contemporaneously imported, such declared values cannot be adopted as customs value. In such cases, the transaction value method is clearly inapplicable as the declared value does not conform to the requirement of the said Section 14(1).... On the other hand, where the declared value is ridiculously low and does not correspond to the ordinary competitive price in international trade, then the other methods of valuation under the Rules are to be used to arrive at the customs value....