1997 (7) TMI 160 - SC - Customs

Short levy of customs duty - Held that - Once it is admitted that the price mentioned in the magazine was not mentioned in the show cause notice issued to the petitioner, any reliance on the said price mentioned in the magazine by the Customs authorities must be held to be illegal. Further it is clear that though this point was taken in the grounds of the appeal before the appellate authorities, a copy of the magazine was never made available to the petitioner. The fact that an extract of the relevant portion thereof was produced before the CEGAT for the first time, does not in our opinion cure the defect. So far as the manufacturer s certificate is concerned, neither in the orders of the Customs authorities nor in the order of the CEGAT is there a finding that the price mentioned in the said certificate was not the correct one or that the certificate was obtained collusively from the foreign manufacturer. We may also point out that there is no finding by the Customs authorities that the price which has been adopted by the Customs authorities was referable to a car of the identical make, model, facilities or gadgets as the one imported. For the aforesaid reasons, the order of the CEGAT and of the Customs authorities cannot be supported. We, accordingly, set aside the orders of the CEGAT as well as the Customs authorities in so far as they are against the appellant and quash the show cause notice issued on 17-6-1985 under Section 28(1) of the Customs Act, 1982.

Summary

Issues:
Assessment of customs duty on a used car imported under Transfer of Residence Rules, 1978.

Analysis:
The appellant imported a used Volvo car to India from Dubai under the Transfer of Residence Rules, 1978. The Customs authorities assessed the value of the car at Rs. 53,305.44 and levied duty at 150%, Auxiliary duty at 40%, and Additional duty of Customs, totaling Rs. 1,28,188/-. The appellant paid the duty under protest and later requested a refund of the alleged excess duty paid. A show cause notice was issued by the Superintendent of Customs alleging a short levy of customs duty of Rs. 1,40,174.70, based on a different assessable value. After a delay, an order was issued reworking the assessable value and the duty payable. The appellant appealed, arguing that the assessable value was incorrectly determined, and the additional levy was time-barred. The appeal was dismissed by the Collector (Appeals) and the CEGAT. The appellant contended that the price lists referred to were not disclosed, and the manufacturer's certificate was not accepted. The Supreme Court noted that the price mentioned in the magazine was not part of the show cause notice and that the manufacturer's certificate was ignored without justification. The Court held that reliance on undisclosed prices and disregarding valid certificates was illegal. The Court set aside the orders of the CEGAT and Customs authorities, quashing the show cause notice and allowing the appeal without costs.