2022 (12) TMI 324 - HC - Customs

Seizure of assorted diamond studded jewellery - Section 111(l) of the Customs Act, 1962 - HELD THAT - Section 14 of Customs Act, 1962 states that the valuation of import and export goods shall be the transactional value of such goods, i.e. the price actually paid or payable when they are sold. This is the primary criteria for the valuation of goods. All the three Authorities have given effect to this primary position. The fact that the Petitioner arrived in India from South Africa, and was intercepted and found in possession of the jewellery in contravention of the provisions of the Act, has been established. We are not shown any statutory provision that mandates the Respondent Custom Authorities that if they call for Trade Panel's Report, they are bound by the same, and the basic principle of transactional value no longer applies. Even otherwise, if the report of the Trade Panel is to be made the foundation of, the same is not found reliable. The Authorities have commented on the same. The Commissioner has observed that from the Trade Panel's Report, it is unclear whether they had valued the goods for import or export purposes, and it is not clear whether these are domestic prices or the goods prevailing in South Africa. The Commissioner thus observed that the report lacks material and does not meet the requirements for giving the status of reliable evidence having a probative value. Therefore, the Authorities, as a matter of fact, have found that the report is not satisfactory. The Respondent cannot be directed to accept the report when it was found to be unreliable. The Respondent Authorities have gone by the basic criteria of valuing the goods in question by considering the transactional value based on invoices found in possession of the Petitioner himself. Despite the same, Authorities at each stage have taken a lenient view and have reduced redemption and personal fines. Petition dismissed.

Summary

Issues:
Challenge to order rejecting Revision filed by Petitioner, valuation of seized jewellery, rejection of Trade Panel report, application of Customs Act, 1962, and perversity in the impugned order.

Analysis:
The Petitioner challenged the order rejecting the Revision filed against the Commissioner of Customs' decision to confiscate seized jewellery valued at Rs. 786825 under Section 111(l) of the Customs Act, 1962. The Commissioner allowed redemption on payment of a fine and imposed a penalty. The Commissioner (Appeals) upheld the decision but reduced the fine and penalty. The Joint Secretary dismissed the Petitioner's Appeal and further reduced the fine and penalty. The Petitioner contended that the valuation based on invoices was incorrect, and the Trade Panel's report valuing the goods at a lower amount should have been considered. The Authorities, however, maintained that transactional value is the standard for valuation under Section 14 of the Customs Act, and the invoices found with the Petitioner were reliable indicators of the actual price paid for the goods.

The Petitioner argued that the Trade Panel's report should have been given effect to as per Customs Valuation Rules, but the Authorities found the report unreliable and preferred the transactional value based on the invoices. The Commissioner (Appeals) emphasized that the transaction value must be adhered to if available, and there was no provision to deduct insurance charges from the invoice price. The Authorities also noted discrepancies in the Trade Panel's report, questioning its reliability. The Court upheld the Authorities' decision to rely on the transactional value indicated by the invoices found with the Petitioner, considering it as the primary criteria for valuation.

The Petitioner cited a Calcutta High Court decision to argue that writ jurisdiction can be invoked if there are stark perversities in the order. However, the Court found no such perversities in the present case and upheld the application of settled principles in determining the value of the seized goods. Despite the Petitioner's contentions, the Authorities' decision to reject the Trade Panel's report and rely on the transactional value was deemed appropriate. The Court concluded that the Authorities had followed the correct legal course in valuing the goods and had taken a lenient view by reducing fines at each stage of the proceedings.

In the absence of any glaring perversities in the impugned order and considering the adherence to transactional value principles, the Court dismissed the Writ Petition, discharged the rule, and awarded no costs in the matter.