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TMI Blog2018 (12) TMI 1923X X X X Extracts X X X X X X X X Extracts X X X X ..... tation to hold that the approach adopted by the respondent does not conform to the statutory procedure laid down in the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007. As already pointed out as per Rule 12, before passing an order of rejection, the authority must first ask the importer for further information. In this case, there is nothing on record to show that this Step-1 was performed. Once the declared value is rejected, the next step is to proceed sequentially in accordance with Rules 4 to 9. The respondent did not do so. As already shown, the respondent by not furnishing the authenticated copies of the documents with true translation has committed gross violation of the principles of natural justice. The matter is remitted to the file of the respondent to proceed afresh in accordance with law - petition allowed by way of remand. - W.P. (MD). No. 7591 of 2015 and W.M.P. (MD) Nos. 19322 & 19323 of 2017 and M.P. (MD) Nos. 1 & 2 of 2015 - - - Dated:- 10-12-2018 - Mr. Justice G.R. Swaminathan For the Petitioner : Mr. B. Kumar, Senior Counsel, for Mr. B. Sathish Sundar. For the Respondent : Mr. R. Aravindan, Standing Counsel. ORDER ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed 01.09.2010 TGHU 7946928 Declaration made by Unik before Indian Customs Declaration made by the supplier before China Difference (USD) % of under valuation Description of goods Qty. Value (USD)(C F) Container No. Description of the goods Qty. Value (USD) (FOB) (7) (8) (9) (10) (11) (12) (13) (14) (15) Star Aniseeds 32Mt 43200 HLXU 6474605 HLXU 6478283 Star Aniseeds 32 Mt. 140800 (@ 4.40/Kg.) 97600 69.31 Star Aniseeds 15Mt 22500 TGHU 7946928 Star Aniseeds 15 Mt 59490(@ 3.966/Kg.) 36990 62.17 4. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ived from the overseas supplier as indicated above was taken as actual transaction value. It was further held that, that would be taken as a contemporaneous value in determining the value of the remaining 57 numbers of bills of entry. The petitioner was called upon to pay the differential duty of ₹ 9,21,42,713/- and also pay appropriate interest and penalty equal to the duty. A further penalty of ₹ 1 Crore was levied under Section 114-AA of THE CUSTOMS ACT, 1962. This order is under challenge in this Writ petition. 6. Heard, Mr.B.Kumar, learned Senior counsel appearing for the Writ petitioner and Mr.R.Aravindan, learned Standing counsel appearing for the respondent. 7. The learned Standing counsel appearing for the respondent questioned the very maintainability of this Writ petition. He wanted this Court to relegate the Writ petitioner to availing the statutory appeal remedy. He also contended that the petitioner was given due opportunity and the principles of natural justice were fully complied with. He took this Court to the statements made by the petitioner's representative during the proceedings conducted before the issuance of the show cause notice. He cl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he case pertaining to the 59 bills of entry impugned in the show cause notice. This request was also rejected. 12. As rightly contended by the learned Senior counsel appearing for the petitioner, the procedure adopted by the respondent is not in consonance with the scheme laid down in Customs Valuation (Determination of Value of Imported Goods) Rules, 2007. It contains 13 Rules and a Schedule. Rule 2 defines terms such as identical goods, similar goods, transaction value, etc. Rule 3 provides for determination of the method of valuation. Rule 4 talks about the transaction value of identical goods. Rule 5 talks about the transaction value of similar goods. Rule 6 provides for determination of value where value cannot be determined of Rules 3, 4 and 5. Rules 7 and 8 talk of deductive value and computed value. Rule 9 states out the residual method. 13. As per Rule 11, the importer of his agent shall furnish a declaration disclosing full and accurate details relating to the value of the imported goods. Of course it is open to the officer concerned to reject the value so declared by the importer. Rule 12 provides for such rejection. In the present case, it must be noted that the d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of goods in parameters such as description, quality, quantity, country of origin, year of manufacture of production; (e) the non declaration of parameters such as brand, grade, specifications that have relevance to value; (f) the fraudulent or manipulated documents. 14. A careful reading of Rule 12 indicates that the proper officer must first call upon the importer to furnish further information including the documents or other evidence. After receiving such further information or in the absence of a response from the importer, if the proper officer still has reasonable doubt about the truth or accuracy of the declared value, he shall intimate the importer in writing, the ground for doubting the true or accuracy of the value declared by the importer. Thereafter, a reasonable opportunity of being heard should be given to the importer. Only then, final decision under sub-rule(1) of Rule 12 can be taken for rejection of declared value. The explanation to the Rule 12 is highly significant. It states that Rule 12 by itself does not provide a method for determination of value. It only provides a mechanism and procedure for rejection of declared value. In certain cases where t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt is a Quasi Judicial authority. No doubt, the strict principles of THE INDIAN EVIDENCE ACT, 1872, are not applicable. But then, the principles of natural justice cannot be given a go-bye. The documents on which reliance is placed by the respondent are in a foreign language. The petitioner requested in writing that he should be given an authenticated copy of the documents together with a true translation. This is definitely a reasonable request. The respondent clearly erred in rejecting the same. The learned Standing counsel contended that the petitioner should not be permitted to advance his arguments, because he did not question the order dated 10.09.2014, whereby the aforesaid request was rejected. 19. I am unable to agree with the said contention of the learned Standing counsel appearing for the respondent. 20. Any order passed during the intervening stages of an enquiry can certainly be made a ground of attack while assailing the final order. I can cite the Code of Civil Procedure at this juncture. A suit is being tried. An Interlocutory application is filed and it is disposed of by an order. The party against whom the order was passed can certainly make it as a ground ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Section 14(1) and Section 14(1A), it envisages that the value of any goods chargeable to ad valorem duty has to be deemed price as referred to in Section 14(1). Therefore, determination of such price has to be in accordance with the relevant rules and subject to the provisions of Section 14(1). It is made clear that Section 14(1) and Section 14(1A) are not mutually exclusive. Therefore, the transaction value under Rule 4 must be the price paid or payable on such goods at the time and place of importation in the course of international trade. Section 14 is the deeming provision. It talks of deemed value. The value is deemed to be the price at which such goods are ordinarily sold or offered for sale, for delivery at the time and place of importation in the course of international trade where the seller and the buyer have no interest in the business of each other and the price is the sole consideration for the sale or for offer for sale. Therefore, what has to be seen by the Department is the value or cost of the imported goods at the time of importation, i.e., at the time when the goods reaches the customs barrier. Therefore, the invoice price is not sacrosanct. However, before ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Customs Valuation Rules and not for determining the price at which goods are ordinarily sold at the time and place of importation. This is where the conceptual difference between value and price comes into discussion. 8. ...In Eicher Tractors (supra) this Court observed that Rule 4(1) of the Customs Valuation Rules refers to the transaction value. Utilization of the word 'the' as definite article indicated that what should be accepted as the transaction value for the purpose of assessment under the Customs Act is the price actually paid by the importer for the particular transaction, unless it is unacceptable for the reasons set out in Rule 4 (2). In the said judgment, it has been further held that, the word 'payable' in Rule 4(1) also refers to the transaction value and payability in respect of the transaction envisaged a situation where payment of price stood deferred. Therefore, this decision of the Supreme Court directs the Revenue to decide the validity of the particular value instead of rejecting the transaction value. We wish, however, to clarify that it is still open to the Department based on evidence, to show that the declared price is not t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g in one month would be the same over a period also. Therefore, on the strength of some materials obtained in respect of a few transactions, the respondent could not have determined the value of the remaining 57 transactions also. Only in Statistics and Psephology, the sampling methods are adopted. In matters having serious civil and penal consequences, such sampling methods should not be adopted. 24. I therefore have no hesitation to hold that the approach adopted by the respondent does not conform to the statutory procedure laid down in the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007. As already pointed out as per Rule 12, before passing an order of rejection, the authority must first ask the importer for further information. In this case, there is nothing on record to show that this Step-1 was performed. Once the declared value is rejected, the next step is to proceed sequentially in accordance with Rules 4 to 9. The respondent did not do so. As already shown, the respondent by not furnishing the authenticated copies of the documents with true translation has committed gross violation of the principles of natural justice. 25. I therefore set as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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