1992 (8) TMI 87 - HC - Customs

Summary

Issues Involved:
1. Valuation of imported second-hand car for customs duty.
2. Application of Section 14(1) of the Customs Act and Rule 8 of the Customs Valuation Rules, 1988.
3. Principles of natural justice in customs valuation.
4. Interim relief for release of the car.

Summary:

1. Valuation of Imported Second-Hand Car for Customs Duty:
The petitioner purchased a second-hand Jaguar car in the UK for £1323 and brought it to India. The Customs Department assessed the import duty at Rs. 13 lakhs, using a price of £18,999 from the World Car Catalogue, ignoring the auction price. The petitioner contested this valuation, arguing that the car's actual purchase price should be considered.

2. Application of Section 14(1) of the Customs Act and Rule 8 of the Customs Valuation Rules, 1988:
The petitioner argued that the Department ignored Section 14(1) of the Customs Act, which mandates that the value of imported goods should be the price at which such goods are ordinarily sold in international trade. Rule 8 of the Customs Valuation Rules should be applied in conformity with Section 14. The Court held that the valuation should start from the auction price paid by the petitioner, not the list price of a new car, as per Section 14.

3. Principles of Natural Justice in Customs Valuation:
The Collector of Customs (Appeals) noted that the petitioner was not provided with the World Car Catalogue, violating natural justice principles. The Court found that the Customs Authorities' arbitrary decision to allow only 55% depreciation for a 7-year-old car was unjustifiable and ignored the evidence provided by the petitioner, such as Tarker's Car Price Guide.

4. Interim Relief for Release of the Car:
Given the prolonged detention of the car and accruing demurrage charges, the Court ordered the release of the car upon payment of Rs. 3 lakhs in cash and furnishing a Bank Guarantee of Rs. 3 lakhs. The petitioner was required to produce the car for monthly inspections by the Customs Department.

Conclusion:
The Court issued a Certiorari order, setting aside the Assistant Collector of Customs' valuation and directing a fresh assessment in line with Section 14(1) of the Customs Act and Rule 8 of the Customs Valuation Rules. The respondents were ordered to pay costs of 200 GMs to the petitioner. The request for a stay of the order was rejected.