BALA KRISHNA PILLAI Vs. COMMISSIONER OF CUSTOMS, COCHIN

JUDGEMENT

(1.) THE appellant was working abroad and on his return to India he imported a Mitsubishi Pajero (Diesel) 1995 Model 2800 CC car in 1997. He claimed assessment of the car to Customs duty based on the price of 1800000 FOB Japan. In support of this value, he produced certificate dated 12th December, 1995 from M/s. Mitsubishi Motor Corporation (manufacturer of the car). This certificate contained relevant details such as engine number, chassis number, details of accessories of the vehicle and the date of production and price. Customs authorities, however, refused to accept this valuation and assessed the car to duty at the enhanced value of 3408000. The appellant protested the increase in the assessable value and filed a letter dated 14 -5 -97 stating that the price list he submitted was genuine and that if it is found on verification from the company that the price was not correct, he is willing to pay the amount. This request of the appellant was not accepted and an Order -in -Original was passed confirming assessment on the basis of the higher price. An appeal was filed against this order which was rejected recording that the valuation has been done by the lower authority as per established practice, that an earlier import in January, 1997 had also been assessed adopting the same price. The Commissioner (Appeals) also noted that the price certificate produced by the importer was not acceptable since the said price is not a price for export to India to firm basis for valuation. The present appeal challenges this order.

(2.) THE submission of the appellant is that the car under import, like any other goods, was liable to be assessed to customs duty at the sale price and that since the sale price had been certified by the manufacturer -company itself, there was no justification for rejecting the same. It is also pointed out that the manufacturer had also sent a certificate directly to the Customs Authorities confirming that the price given by them for each chassis number is based on the specifications and options contents for each deal and each country. They also requested for levy of customs duty based on the prices of the cars. During the hearing of the case learned Counsel appearing for the appellants contended that the valuation carried out by the Customs Authorities is contrary to law, inasmuch as, valuation of the goods is to be done according to their sale price (transaction value) and not according to prices noted from various publications. Strong reliance has been placed on the decision of the Calcutta High Court in Debabrata Ghosh v. Assistant Collector of Customs reported in 1993 (68) E.L.T. 551 (Cal.) in support of the contention. The learned Counsel pointed out that the case before the Calcutta High Court related to the purchase of a car in public auction at bargain price. When this price was rejected for assessment by the Customs Authorities and the assessment made on the basis of prices shown in World Car Catalogue, the High Court held that such a procedure was totally contrary to the principle of valuation laid down in Section 14 of the Customs Act and the Valuation Rules. The Court also observed that there is no basis for the so called established practice inasmuch as, it is nowhere laid down in the Rules that if a second -hand car is brought by an importer into India, duties for the said second -hand car have to be calculated on the basis of the price of a new car. The Court also observed that the argument of long standing practice cannot override the provisions of the Customs Act.

(3.) AS against the aforesaid submissions on behalf of the appellants, the learned Departmental Representative has pointed out that the Customs Authorities had obtained price list from the manufacturer. A copy of the same was also filed under a letter dated 18 -2 -2003 of the Assistant Commissioner, Customs, Review Cell, Cochin. In the instant case for the purpose of assessment of the car, a list price has been substituted for the sale price. The sale price had also been certified by the manufacturer. The purported single page price -list filed before us is mostly in the Japanese language. This price list was not made available to the importer during the adjudication proceedings and his comments obtained. This price list has been preferred after rejecting the sale price on the ground that the sale price was not for import to India. This action does not appear to be justified at all, inasmuch as the present list price also does not mention that it is for sale to India. Further, sales need not be at list prices. Even otherwise, since the sale price had been certified as on FOB basis, i.e. without regard to country, there does not appear to be any substance in the objection that the price is not for import to India. The observation that the assessment has been carried out according to established practice also cannot stand in the face of the decision of the Calcutta High Court that a long standing practice is no ground to adopt a method of valuation contrary to the specific provision in the statute. Under these circumstances, the adoption of a higher value for the customs assessment and demand of duty on that basis is not sustainable. Accordingly, the appeal is allowed after setting aside the impugned order with consequential relief to the appellant.