1982 (2) TMI 68 - CGOVT - Customs

Valuation - Deletion of word normally in preference to ordinarily - Interpretation - Place of importation - Wholesale Cash price - Relevancy of

Summary

Issues:
1. Whether sea freight for goods of like kind and quality should be considered for inclusion in the assessable value of goods imported by air.
2. Interpretation of Section 14 of the Customs Act, 1962 regarding the valuation of imported goods.
3. Determining the meaning of the expressions "time and place of importation" in the context of valuation for customs purposes.
4. Comparison of the valuation norms based on the positive concept of valuation and the notional concept of valuation.
5. Examination of international practices regarding the determination of the "place of introduction" for goods imported by air.

Analysis:
1. The petitioners argued that sea freight for like goods should be considered as freight for articles imported by air, provided the sea freight at the material time is ascertainable. They contended that air transport is not the ordinary mode of transport for most goods and that sea transport remains predominant. The government, however, emphasized that the actual sale price, including air freight, should be the dutiable value of imported goods under the positive concept of valuation.

2. The interpretation of Section 14 of the Customs Act was crucial in determining the valuation of imported goods. The petitioners highlighted the distinction between "normally" and "ordinarily" in the context of valuation. They argued that the word "ordinarily" implies considering the ordinary means of transport over extraordinary ones like air transport. However, the government maintained that the actual sale price, which includes air freight, should be accepted as the value for assessment purposes.

3. The meaning of the expressions "time and place of importation" was debated, with the petitioners suggesting a broader interpretation that includes a reasonable time for sale and a wider area for the place of importation. The government referred to international practices to assert that the place of importation for goods imported by air should be the point of landing, such as the airport or dock.

4. The comparison between the positive concept of valuation and the notional concept of valuation was discussed. The government clarified that India follows the positive concept, where the actual sale price of imported goods, including air freight, is the dutiable value. The notional concept, prevalent in European and American countries, was not subscribed to by India.

5. International practices regarding the determination of the "place of introduction" for goods imported by air were examined. The government highlighted that the point of landing, such as the airport or dock, should be considered the place of importation for valuation purposes. The petitioners' argument that sea freight should substitute air freight for air consignments was rejected by the government.