1993 (7) TMI 94 - HC - Customs

Summary

Issues:
1. Charging of Customs Duty on import and fixing valuation of imported articles.
2. Interpretation of Customs Act provisions regarding valuation of imported goods for customs duty.
3. Application of rate of exchange by Central Government for determining value of imported goods.
4. Allegation of arbitrary determination of exchange rate by Central Government.
5. Estoppel arising from Import Policy concessions.
6. Comparison with previous judgments on withdrawal of concessions.

Analysis:

1. The writ petition concerns the charging of Customs Duty on import and the valuation of imported articles. The petitioner imported acrylonitrile under the import policy, purchasing Exim Scrips for payment in U.S. Dollars. However, Customs officials wanted to fix the value of the goods based on a different exchange rate, causing significant financial impact on the petitioner.

2. The main argument raised by the petitioner's counsel is that the Customs Authorities cannot determine a different valuation for imported goods for the purpose of charging customs duty. The value should be based on the actual price paid by the petitioner to the foreign sellers, as per Section 14 of the Customs Act and relevant Customs Valuation Rules.

3. The dispute revolves around the interpretation of Section 14(3) of the Customs Act regarding the application of the rate of exchange by the Central Government for determining the value of imported goods. The petitioner contends that the rate set by the Central Government is arbitrary and differs from the rate set by the Reserve Bank of India.

4. The petitioner argues that the Central Government's determination of the exchange rate under Section 14(3)(i) is arbitrary, leading to inflated values of imported goods and excessive duty charges. However, the court finds that the Central Government's rate of exchange applies uniformly to all imported articles and is not deemed arbitrary without additional evidence.

5. The petitioner raised the issue of estoppel, claiming that the Central Government should honor the concession granted under the Import Policy regarding the rate of exchange for Exim Scrips. The court clarifies that the Import Policy concessions do not impact the valuation of imported goods for customs duty, which is governed by the Customs Act.

6. In comparing with previous judgments, the court distinguishes the present case from situations where concessions were retrospectively withdrawn. The court finds no basis to apply the principles of previous cases to the current scenario, where the valuation of imported goods is to be determined based on the exchange rate set by the Central Government at the time of import.

In conclusion, the court dismisses the writ petition, emphasizing that the valuation of imported goods for customs duty must adhere to the provisions of the Customs Act, including the application of the exchange rate determined by the Central Government.