9911796707
TMI Blog1992 (8) TMI 87X X X X Extracts X X X X X X X X Extracts X X X X ..... urchased for the purpose of bringing it to India. The Department has contested the said stand of the petitioner. The petitioner's contention that the car was purchased at a bargain price was also disputed by the Department. The dispute is about the way the car is to be valued for the purpose of charging import duty. The Assistant Collector of Customs informed the petitioner that the import duty in respect of the said car had been fixed at Rs. 13 lakhs. The petitioner was not in a position to pay this large sum of money and requested the Assistant Collector of Customs to give the order of assessment in writing. Thereupon on 1st April, 1992 that is 10 weeks after the arrival of the car at the dock site, the Assistant Collector of Customs gave the petitioner a written order, assessing the duty on the said imported car at Rs. 13 lakhs. Further duty was imposed on various accessories of the car amounting to a sum of Rs. 2,07.50 paise. The auction price of the car was not taken into account for the purpose of calculation of the duty but a price of £ 18,999 on the basis of a World Car Catalogue was taken into account. The claim of the petitioner for trade discount, freight, insurance etc. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on at the relevant time was shown as £ 2225 representing only 12% of the original price of the new car of the same make, being quoted at £ 18,995. The Assistant Collector of Customs allowed only 55% depreciation for 7 years while even the Income-Tax Authorities allow 20% depreciation annually on capital goods such as motor vehicles. The arbitrary decision on the part of the Customs Authorities in allowing only 55% depreciation on catalogue price in 7 years is neither legal nor justifiable but a peculiar system practised by them just for the sake of convenience in total disregard of the principles of natural justice. 4. The petitioner has now come up by way of this writ petition challenging the method of calculation of import duty on the car, brought from United Kingdom. The contention of the petitioner is that the Department has given a complete go-by to the provisions of Section 14(1) of the Customs Act. They have also ignored the fact that the Valuation Rules will apply subject to the provisions of Section 14 of the Customs Act. In any event, the Valuation Rules cannot override or overrule the provisions of Section 14. The Valuation Rules must be read to be in conformably with t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e business of each other and the price is the sole consideration for the sale or offer for sale: Provided that such price shall be calculated with reference to the rate of exchange as in force on the date on which a bill of entry is presented under Section 46, or a shipping bill or bill of export, as the case may be, is presented under Section 50; (1A) Subject to the provisions of sub-section (1) the price referred to in that sub-section in respect of imported goods shall be determined in accordance with the rules made in this behalf;". 7. The question, therefore, is what should be the starting point of valuation of the imported car. Should the valuation be done on the basis of the list price of the manufacturer which is the price of a new brand car at which the car is sold or alternatively, as Mr. Gupta has suggested, the starting point should be the auction price of the car which price was actually paid by the petitioner for purchase of the car? In my judgment. Section 14 of the Customs Act is quite clear and must be followed. The endeavour of the Department should be to find out the "price at which such or like goods are ordinarily sold, or offered for sale, for delivery at t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... acts of this case, an arbitrary and fictitious valuation of the car has been fixed for a second hand car taking into account the price of a new car. A copy of Tarker's Car Price Guide, April 1992 has been produced in Court. That contains the price of second hand cars in the United Kingdom. The price of 1985 model jaguar cars which are similar in description has been valued at less than £ 3,000. It does not appear on what basis the list price of a new car was taken for ascertaining the value of the second hand car. It is also not known how the figure of depreciation was arrived at. The depreciation in India at the moment is 20% per annum for a car for the Income-tax purpose. 11. In my view, the valuation has been arrived it in total disregard to the provision of Section 14 and also the provisions of Rule 8. In the premises, there will be an order of Certiorari as prayed for in terms of prayer (b) of the petition. The order dated 3rd April, 1992 passed by the Assistant Collector of Customs is ex facie erroneous and is accordingly set aside. The Assistant Collector of Customs, Respondent No. 1 is directed to make a fresh assessment in conformably with the provisions of Section 14(1) ..... X X X X Extracts X X X X X X X X Extracts X X X X
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