1975 (11) TMI 49 - HC - Customs

Summary

Issues Involved:
1. Validity of Customs notices under Section 28(1) and orders under Section 28(2) of the Customs Act, 1962.
2. Determination of f.a.s. value for exemption from export duty under the Customs Act.
3. Applicability of representations and estoppel against the Customs authorities.
4. Compliance with procedural requirements under Section 28 of the Customs Act.

Issue-wise Detailed Analysis:

1. Validity of Customs notices under Section 28(1) and orders under Section 28(2) of the Customs Act, 1962:
The petitioner, Bird and Co. (Pvt.) Ltd., challenged the notices issued by the Collector of Customs and Central Excise under Section 28(1) and an order made under Section 28(2) of the Customs Act, 1962. The petitioner argued that the notices did not disclose any grounds for the alleged short levy of duty, rendering them without jurisdiction, illegal, void, and of no effect. The court held that Section 28 does not expressly require a statement of grounds for the demand of duty short levied. The petitioners were aware of the grounds based on their responses to the show-cause notice, and thus, the contention that the notices should be quashed was rejected.

2. Determination of f.a.s. value for exemption from export duty under the Customs Act:
The petitioner claimed that their goods qualified for exemption from export duty under a notification dated June 19, 1968, as their f.a.s. value was not less than Rs. 3,500 per tonne. The court noted that the mode of valuation prescribed in Section 14 of the Customs Act must apply for determining the f.a.s. value. The value should reflect the price at which such or like goods are ordinarily sold at the time and place of exportation in the course of international trade. The Customs authorities had taken the basis of standard goods and added the premium value determined by the Indian Jute Mills Association. The petitioners did not provide evidence to contradict this valuation method.

3. Applicability of representations and estoppel against the Customs authorities:
The petitioner relied on a notification dated December 4, 1962, and a letter dated November 29, 1968, claiming that the Customs authorities were estopped from challenging the f.a.s. values declared in the registration certificates. The court held that the notification did not represent that the registration certificate would be conclusive proof of the f.a.s. value. The Customs authorities retained the statutory duty to assess and levy customs duty. Any representation contrary to or inconsistent with the statutory provisions of Section 2(41) and Section 14 of the Customs Act cannot result in a valid agreement on the basis of which estoppel can be founded.

4. Compliance with procedural requirements under Section 28 of the Customs Act:
The petitioners argued that they were not given sufficient opportunity to show cause against the notices. The court acknowledged that the respondents acted precipitately in confirming the demand without considering the evidence furnished by the petitioners. The orders made under Section 28(2) were set aside, and the respondents were directed to pass fresh orders after considering the evidence and representations by the petitioners, providing them a fresh opportunity to be heard if they so desired.

Conclusion:
The appeal was dismissed, and the court upheld the Customs authorities' right to reassess the f.a.s. value of the goods and determine the liability for export duty based on Section 14 of the Customs Act. The petitioners were granted an opportunity to present their case afresh before the Customs authorities.