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Friday, September 5, 2014

Section 130(E) of the Customs Act, 1962 and Section 18(2) read with Section 28(2) of the Customs Act, 1962.- sec.14 , rule 5 - import of goods - custom duty paid - after the lapse of 5 years show cause notice was given to pay additional duty with penalty basing on the information on computer outputs of department as those goods costs more than the declared - challenged - Apex court held that In the absence of any material produced by the Revenue in proof of the alleged comparable imports at a higher value, the impugned order which eventually confirmed the original order of assessment by the Assistant Commissioner of Customs dated 31.3.2001 cannot be sustained for two reasons– (1) the mere existence of an alleged computer printout is not proof of the existence of comparable imports; (2) assuming such a printout exists and the contents thereof are true, the question still remains whether the transaction evidenced by the said computer printout are comparable to the transaction of the appellant. The appellant will have to be given reasonable opportunity to establish (if he can) that the transactions are not comparable.The impugned order and the original assessment order are therefore, set aside. However, it will be open to the respondent(revenue) to proceed against the appellants herein pursuant to the show cause notice dated 25.9.2000 in accordance with law. The appeals are allowed accordingly.= CIVIL APPEAL NOS. 433-434 OF 2006 M/s. Gira Enterprises & Anr. …Appellants Versus Commissioner of Customs, Ahmedabad …Respondent = 2014- Aug.Part - http://judis.nic.in/supremecourt/filename=41842

Section 130(E) of the  Customs Act, 1962 and Section 18(2) read with Section 28(2) of the  Customs Act, 1962.-  sec.14 , rule 5 -   import of goods - custom duty paid - after the lapse of 5 years show cause notice was given to pay additional duty with penalty basing on the information on computer outputs of department as those goods costs more than the declared - challenged - Apex court held that In the absence of any material produced by the  Revenue  in  proof  of the alleged comparable imports at a higher value, the impugned  order  which eventually confirmed the original  order  of  assessment  by  the  Assistant Commissioner of Customs dated 31.3.2001 cannot be sustained for two  reasons– (1) the mere existence of an alleged computer printout  is  not  proof  of the existence of comparable imports; (2) assuming  such  a  printout  exists and the contents thereof are true, the question still  remains  whether  the transaction evidenced by the said computer printout are  comparable  to  the transaction  of  the  appellant.   The  appellant  will  have  to  be  given reasonable opportunity to establish (if he can) that  the  transactions  are not comparable.The impugned order and the original assessment  order  are  therefore, set aside.  However, it will be open to the respondent(revenue)  to  proceed against the appellants herein  pursuant  to  the  show  cause  notice  dated 25.9.2000 in accordance with law. The appeals are allowed accordingly.=

Subsequently, a show cause notice dated 25.9.2000 came  to  be  issued
to the appellants by the  Commissioner  of  Customs,  Gujarat  at  Ahmedabad
calling upon the appellants to  show  cause  why  certain  action  indicated
therein cannot be taken against the appellants.   The  relevant  portion  of
the show cause notice is as follows:-
      “Therefore, M/s. Gira Enterprises, Ahmedabad are  hereby  called  upon
to show cause to the Commissioner of Customs, Ahmedabad as to why:

(I) the provisionally assessed Bills of Entry (as per Annexure  'A')  should
not be finalised after taking in value of US $ 1860.00 PMT CIF.

(ii) The differential duty of Rs.31,53,833/-(as  per  Annexure  'A')  should
not be recovered under Section 18(2) read with Section 28(2) of the  Customs
Act, 1962.

(iii)The goods which are liable for confiscation  under  Section  111(m)  of
the Customs Act, 1962 should not be confiscated and  why  fine  in  lieu  of
confiscation should not  be  imposed  as  goods  has  already  been  cleared
provisionally against Bond for test and value  verification.

(iv) Penalty should not be  imposed  on  M/s.  Gira  Enterprises,  Ahmedabad
under Section 114A/112(a) of the Customs Act, 1962.

(v) Interest under Section 28AB of the  Customs  Act,  1962  should  not  be
recovered.”


4.    It is also stated in the show cause notice that the goods imported  by
the appellants were subjected to a test in  the  Central  Excise  &  Customs
Laboratory, Baroda.  According to the show cause notice, the  chemical  name
of the goods was verified and it was found  to  be  “Cyanuric  Chloride”  as
known in the International market.  It is further stated in the  show  cause
notice that on the basis of certain information obtained through a  computer
print out from the Customs  House,  Mumbai,  the  Commissioner  of  Customs,
Gujarat noticed  that  a  large  number  of  Cyanuric  Chloride(100)  import
transactions (between the months of June 1994 to November 1994)  took  place
and the cost of the unit price in each one of those imports was US $  1950/-
PMT(CIF) as against the value declared by the appellants of US $ 500/- PMT.=
 Section 14 reads as follows:-
      “Valuation of goods for purposes of assessment. –

(1) For the purposes of [the Customs Tariff Act, 1975(51 of 1975)],  or  any
other law for the time being in  force  whereunder  a  duty  of  customs  is
chargeable on any goods by reference to  their  value,  the  value  of  such
goods shall be deemed to be the price  at  which  such  or  like  goods  are
ordinarily sold, or offered for sale, for delivery at the time and place  of
importation  of  exportation,  as  the  case  maybe,  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 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;]

      1 *
      [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.]

      2...

      3...”

13.   It can be seen from Section 14 that the value of  the  imported  goods
is “deemed to be the price at which  such  goods  are  ordinarily  sold,  or
offered for sale ……”.  The Section further stipulates  that  such  price  of
the imported goods is to be determined in accordance with the rules made  in
that behalf.

14.   The  Government  of  India  made  rules  known  as  Customs  Valuation
(Determination of the Price of Imported Goods) Rules,  1988.   Rule  3(i)[1]
stipulates that for the purpose of the rules,  the  value  of  the  imported
goods shall be the transaction value.  Rule  3(ii)[2]  provides  that  where
the value of the imported goods cannot be determined under  Rule  3(i)  then
the same is to be determined in  accordance  with  the  various  methods  of
determination (of the value of the  goods)  provided  under  Rules  5  to  8
sequentially.

15.   The expression “transaction value” is defined under the Rule  2(f)  of
the Customs Valuation(Determination of Price of Imported Goods) Rules,  1988
as follows:-
2(f) “transaction value” means the value determined in accordance with  Rule
4 of these rules.”

16.   Rule 4(1) stipulates as follows:-
“The transaction value of imported goods shall be the  price  actually  paid
or payable for the  goods  when  sold  for  export  to  India,  adjusted  in
accordance with the provisions of Rule 9.”


17.   Sub-rule (2)[3] stipulates that the transaction value of the  imported
goods shall be accepted subject to the various exceptions specified  in  the
said Section, the details of which many not be  necessary  for  the  present
purpose.

18.    In substance, Rule 5 stipulates the next  alternative  procedure  for
determining the value of the imported goods and it reads as follows:-
 5.  Transaction value of identical goods –

(1)(a)      Subject to the provisions of Rule 3 of these  rules,  the  value
of imported goods shall be the transaction value  of  identical  goods  sold
for export to India and imported at or about the  same  time  as  the  goods
being valued.

(b) In applying this rule, the transaction value of  identical  goods  in  a
sale at the same commercial level and in substantially the same quantity  as
the goods being valued shall be used to  determine  the  value  of  imported
goods.

(c)  Where no sale referred to in clause (b) of sub-rule (1) of  this  rule,
is found, the transaction value of  identical  goods  sold  at  a  different
commercial level or in  different  quantities  or  both,  adjusted  to  take
account of the  difference  attributable  to  commercial  level  or  to  the
quantity or both shall be used, provided  that  such  adjustments  shall  be
made on the basis of demonstrated evidence  which  clearly  establishes  the
reasonableness and accuracy of  the  adjustments,  whether  such  adjustment
leads to an increase or decrease in the value.

(2)         Where the costs and changes referred to in sub-rule(2)  of  Rule
9 of these rules are included in the transaction value of  identical  goods,
an adjustment shall be made, if there are significant  differences  in  such
costs and charges between the goods being valued and the identical goods  in
question arising from differences in distances and means of transport.

(3)    In applying  this  rule,  if  more  than  one  transaction  value  of
identical goods is found; the lowest such value shall be used  to  determine
the value of imported goods.”=

It is not necessary  that  in  every  case  of  import  the   importer
declares the price actually paid by him or payable by  him.  
Therefore,  if
in a given case the Revenue notices identical goods have  been  imported  by
other importers in comparable transactions at  a  different  rate  (normally
higher rate) then Revenue is enabled by Rules  5  to  reject  the  valuation
made by the importer and determine the “price actually paid or  payable”  by
the importer.

21.   In the case at  hand,  no  doubt  the  revenue  claims  to  have  some
information based on certain alleged imports made at the Bombay port at  the
relevant point of time that the import in question  took  place.  
According
to the revenue, those imports at Bombay were declared and valued at  a  much
higher rate than the value declared by  the  appellants  herein.  
Therefore,
the  valuation  of  the  goods  imported  by   the   appellant   was   found
unacceptable.  Hence, the procedure under Rule 5 was resorted to.

22.   However,  the  respondent(revenue)  did  not  supply  the  information
(alleged computer print out) which formed the basis of the  conclusion  that
the  appellants  herein  under-valued  the  goods  imported.
 In   such   a
situation, the appellants obviously cannot and did not have any  opportunity
of establishing that the claim of the revenue is unsustainable in  law.  
If
the information which formed  the  basis  for  the  Revenue  to  reject  the
appellant’s valuation is supplied to the appellants, the appellants  perhaps
will have  an  opportunity  to  dispute  the  comparability  of  the  import
transactions allegedly contained in the computer printout on various  counts
may not be possible to catalogue.

23.   The appellants, of course, admit that the goods imported by  them  are
known commercially as ‘Cyanuric Chloride’ as specified in  the  show  cause.
Whether Cyanuric Chloride was imported at the  relevant  point  of  time  by
others in comparable transactions, i.e., is “a sale at the  same  commercial
level and in substantially the  same  quantity”  etc.  is  a  matter  to  be
considered on the examination of the material relied upon  by  the  Revenue.
A reasonable opportunity must be given to the appellant to  demonstrate  (if
at all) that the transactions relied upon by the Revenue are not  comparable
transactions.

24.   In the absence of any material produced by the  Revenue  in  proof  of
the alleged comparable imports at a higher value, the impugned  order  which
eventually confirmed the original  order  of  assessment  by  the  Assistant
Commissioner of Customs dated 31.3.2001 cannot be sustained for two  reasons

(1) the mere existence of an alleged computer printout  is  not  proof  of
the existence of comparable imports; 
(2) assuming  such  a  printout  exists
and the contents thereof are true, the question still  remains  whether  the
transaction evidenced by the said computer printout are  comparable  to  the
transaction  of  the  appellant.   
The  appellant  will  have  to  be  given
reasonable opportunity to establish (if he can) that  the  transactions  are
not comparable.

25.   The impugned order and the original assessment  order  are  therefore,
set aside.  However, it will be open to the respondent(revenue)  to  proceed
against the appellants herein  pursuant  to  the  show  cause  notice  dated
25.9.2000 in accordance with law.

26.   The appeals are allowed accordingly.

2014- Aug.Part - http://judis.nic.in/supremecourt/filename=41842

                                                                Reportable
                        IN THE SUPREME COURT OF INDIA
                        CIVIL APPELLATE JURISDICTION
                      CIVIL APPEAL NOS. 433-434 OF 2006


M/s. Gira Enterprises & Anr.                      …Appellants

            Versus

Commissioner of Customs, Ahmedabad           …Respondent






                                  O R D E R


      These are statutory appeals filed under Section 130(E) of the  Customs
Act, 1962 from the  judgment  and  order  dated  23.8.2005,  passed  by  the
Customs, Excise and Service Tax Appellate  Tribunal,  West  Zonal  Bench  at
Mumbai in Appeal No. C/791 & 792/03/Mum.

2.    The appellants imported two  consignments  of  “2-4-6  Tricloro  1-3-5
Triazine” aggregating 74.10 MT from China under  two  Bills  of  Entry,  the
cost of which is declared by the appellants to be SG $ 750/- PMT  equivalent
to US $ 500/- PMT.   The  goods  were  provisionally  assessed  and  allowed
clearance on 17.9.1994.

3.    Subsequently, a show cause notice dated 25.9.2000 came  to  be  issued
to the appellants by the  Commissioner  of  Customs,  Gujarat  at  Ahmedabad
calling upon the appellants to  show  cause  why  certain  action  indicated
therein cannot be taken against the appellants.   The  relevant  portion  of
the show cause notice is as follows:-
      “Therefore, M/s. Gira Enterprises, Ahmedabad are  hereby  called  upon
to show cause to the Commissioner of Customs, Ahmedabad as to why:

(I) the provisionally assessed Bills of Entry (as per Annexure  'A')  should
not be finalised after taking in value of US $ 1860.00 PMT CIF.

(ii) The differential duty of Rs.31,53,833/-(as  per  Annexure  'A')  should
not be recovered under Section 18(2) read with Section 28(2) of the  Customs
Act, 1962.

(iii)The goods which are liable for confiscation  under  Section  111(m)  of
the Customs Act, 1962 should not be confiscated and  why  fine  in  lieu  of
confiscation should not  be  imposed  as  goods  has  already  been  cleared
provisionally against Bond for test and value  verification.

(iv) Penalty should not be  imposed  on  M/s.  Gira  Enterprises,  Ahmedabad
under Section 114A/112(a) of the Customs Act, 1962.

(v) Interest under Section 28AB of the  Customs  Act,  1962  should  not  be
recovered.”


4.    It is also stated in the show cause notice that the goods imported  by
the appellants were subjected to a test in  the  Central  Excise  &  Customs
Laboratory, Baroda.  According to the show cause notice, the  chemical  name
of the goods was verified and it was found  to  be  “Cyanuric  Chloride”  as
known in the International market.  It is further stated in the  show  cause
notice that on the basis of certain information obtained through a  computer
print out from the Customs  House,  Mumbai,  the  Commissioner  of  Customs,
Gujarat noticed  that  a  large  number  of  Cyanuric  Chloride(100)  import
transactions (between the months of June 1994 to November 1994)  took  place
and the cost of the unit price in each one of those imports was US $  1950/-
PMT(CIF) as against the value declared by the appellants of US $ 500/- PMT.

5.    The appellants filed a detailed reply dated  11.12.2000  wherein  they
disputed their liability to make any further payment  as  indicated  in  the
show cause notice.  The appellants also took a specific stand  that  a  copy
of the computer print out which formed the basis of show  cause  notice  had
not been supplied to the appellants.

6.     Eventually,  the  concerned  Assistant  Commissioner  finalised   the
assessment by valuing the imported goods at US $  1860/-  PMT  by  an  order
dated 31.3.2001.

7.    Aggrieved by the same, the appellants herein carried the matter in  an
appeal to the Commissioner of Customs(Appeals). By an order dated  8.8.2001,
the said appeal was allowed wherein the appellate  authority  recorded  “the
method of determination  of  the  assessable  value  as  per  Rule  5  lacks
specific evidence, therefore, the same is not legal and proper”.

8.    Revenue carried the matter  in  further  appeal  before  the  Customs,
Excise and Gold (Control) Appellate Tribunal.  By an order dated  15.2.2002,
the said Tribunal remitted the matter back to  the  Commissioner  (Appeals).
On such remittance, the Commissioner  (Appeals)  upheld  the  order  of  the
Assistant Commissioner confirming the enhancement of the value at US $  1860
PMT CIF.  Again, the matter was carried by the appellants  to  the  Customs,
Excise  and  Service  Tax  Tribunal  unsuccessfully.   By  an  order   dated
23.8.2005, which was impugned in the  instant  appeal,  the  appeal  of  the
appellants herein was dismissed by the Tribunal.

9.    It is argued on behalf  of  the  appellant  that  the  assessment  and
demand of the customs duty on the basis of the valuation of the goods  at  a
price much higher than what was declared by the appellant to  be  the  price
paid by the appellant is without any  basis  in  law,  without  any  legally
admissible evidence and opposed to the principles of natural justice as  the
only material relied upon by the Revenue i.e. copy of the  alleged  printout
was not supplied to the appellant.  Therefore, the appellant  had  no  means
of knowing as to whether any imports of comparable nature were made  at  the
relevant point of time.

10.   On the other hand it is argued by the Revenue that the impugned  order
calls for no interference.

11.   Section 12 of the Customs Act, 1962 mandates that  duties  of  customs
shall be levied at such rates as may be specified under the  Customs  Tariff
Act, 1975(51 of 1975), or any other law for the  time  being  in  force,  on
goods imported into, or  exported  from,  India.   Undisputedly,  the  goods
imported by the appellants are goods which are assessable  to  Customs  Duty
under Entry 2942 of the First Schedule of the Customs Tariff Act, 1975.   It
is also not in dispute that the duty is an ad valorem duty.  Section  14  of
the Customs Act stipulates the method and manner of  the  valuation  of  the
goods which are  exigible  to  duties  under  the  Customs  Tariff  Act  and
assessable to ad-valorem duty.

12.   Section 14 reads as follows:-
      “Valuation of goods for purposes of assessment. –

(1) For the purposes of [the Customs Tariff Act, 1975(51 of 1975)],  or  any
other law for the time being in  force  whereunder  a  duty  of  customs  is
chargeable on any goods by reference to  their  value,  the  value  of  such
goods shall be deemed to be the price  at  which  such  or  like  goods  are
ordinarily sold, or offered for sale, for delivery at the time and place  of
importation  of  exportation,  as  the  case  maybe,  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 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;]

      1 *
      [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.]

      2...

      3...”

13.   It can be seen from Section 14 that the value of  the  imported  goods
is “deemed to be the price at which  such  goods  are  ordinarily  sold,  or
offered for sale ……”.  The Section further stipulates  that  such  price  of
the imported goods is to be determined in accordance with the rules made  in
that behalf.

14.   The  Government  of  India  made  rules  known  as  Customs  Valuation
(Determination of the Price of Imported Goods) Rules,  1988.   Rule  3(i)[1]
stipulates that for the purpose of the rules,  the  value  of  the  imported
goods shall be the transaction value.  Rule  3(ii)[2]  provides  that  where
the value of the imported goods cannot be determined under  Rule  3(i)  then
the same is to be determined in  accordance  with  the  various  methods  of
determination (of the value of the  goods)  provided  under  Rules  5  to  8
sequentially.

15.   The expression “transaction value” is defined under the Rule  2(f)  of
the Customs Valuation(Determination of Price of Imported Goods) Rules,  1988
as follows:-
2(f) “transaction value” means the value determined in accordance with  Rule
4 of these rules.”

16.   Rule 4(1) stipulates as follows:-
“The transaction value of imported goods shall be the  price  actually  paid
or payable for the  goods  when  sold  for  export  to  India,  adjusted  in
accordance with the provisions of Rule 9.”


17.   Sub-rule (2)[3] stipulates that the transaction value of the  imported
goods shall be accepted subject to the various exceptions specified  in  the
said Section, the details of which many not be  necessary  for  the  present
purpose.

18.    In substance, Rule 5 stipulates the next  alternative  procedure  for
determining the value of the imported goods and it reads as follows:-
 5.  Transaction value of identical goods –

(1)(a)      Subject to the provisions of Rule 3 of these  rules,  the  value
of imported goods shall be the transaction value  of  identical  goods  sold
for export to India and imported at or about the  same  time  as  the  goods
being valued.

(b) In applying this rule, the transaction value of  identical  goods  in  a
sale at the same commercial level and in substantially the same quantity  as
the goods being valued shall be used to  determine  the  value  of  imported
goods.

(c)  Where no sale referred to in clause (b) of sub-rule (1) of  this  rule,
is found, the transaction value of  identical  goods  sold  at  a  different
commercial level or in  different  quantities  or  both,  adjusted  to  take
account of the  difference  attributable  to  commercial  level  or  to  the
quantity or both shall be used, provided  that  such  adjustments  shall  be
made on the basis of demonstrated evidence  which  clearly  establishes  the
reasonableness and accuracy of  the  adjustments,  whether  such  adjustment
leads to an increase or decrease in the value.

(2)         Where the costs and changes referred to in sub-rule(2)  of  Rule
9 of these rules are included in the transaction value of  identical  goods,
an adjustment shall be made, if there are significant  differences  in  such
costs and charges between the goods being valued and the identical goods  in
question arising from differences in distances and means of transport.

(3)    In applying  this  rule,  if  more  than  one  transaction  value  of
identical goods is found; the lowest such value shall be used  to  determine
the value of imported goods.”


19.   In substance, Rule 5 enables the Revenue to  determine  the  value  of
the imported  goods  on  the  basis  of  the  identical  imported  goods  of
comparable  import  transaction.  Such  a  procedure/course  of  action   is
authorized notwithstanding the mandate of Rule  4(2)  that  the  transaction
value shall be accepted. Obviously, such an alternative  mode  of  valuation
is authorized as Rule 4 declares that the transaction value of the  imported
goods shall be the “price actually paid or payable”.  Necessarily  the  rule
implies the need of determination of the price actually paid or payable.

20.   It is not necessary  that  in  every  case  of  import  the   importer
declares the price actually paid by him or payable by  him.   Therefore,  if
in a given case the Revenue notices identical goods have  been  imported  by
other importers in comparable transactions at  a  different  rate  (normally
higher rate) then Revenue is enabled by Rules  5  to  reject  the  valuation
made by the importer and determine the “price actually paid or  payable”  by
the importer.

21.   In the case at  hand,  no  doubt  the  revenue  claims  to  have  some
information based on certain alleged imports made at the Bombay port at  the
relevant point of time that the import in question  took  place.   According
to the revenue, those imports at Bombay were declared and valued at  a  much
higher rate than the value declared by  the  appellants  herein.  Therefore,
the  valuation  of  the  goods  imported  by   the   appellant   was   found
unacceptable.  Hence, the procedure under Rule 5 was resorted to.

22.   However,  the  respondent(revenue)  did  not  supply  the  information
(alleged computer print out) which formed the basis of the  conclusion  that
the  appellants  herein  under-valued  the  goods  imported.   In   such   a
situation, the appellants obviously cannot and did not have any  opportunity
of establishing that the claim of the revenue is unsustainable in  law.   If
the information which formed  the  basis  for  the  Revenue  to  reject  the
appellant’s valuation is supplied to the appellants, the appellants  perhaps
will have  an  opportunity  to  dispute  the  comparability  of  the  import
transactions allegedly contained in the computer printout on various  counts
may not be possible to catalogue.

23.   The appellants, of course, admit that the goods imported by  them  are
known commercially as ‘Cyanuric Chloride’ as specified in  the  show  cause.
Whether Cyanuric Chloride was imported at the  relevant  point  of  time  by
others in comparable transactions, i.e., is “a sale at the  same  commercial
level and in substantially the  same  quantity”  etc.  is  a  matter  to  be
considered on the examination of the material relied upon  by  the  Revenue.
A reasonable opportunity must be given to the appellant to  demonstrate  (if
at all) that the transactions relied upon by the Revenue are not  comparable
transactions.

24.   In the absence of any material produced by the  Revenue  in  proof  of
the alleged comparable imports at a higher value, the impugned  order  which
eventually confirmed the original  order  of  assessment  by  the  Assistant
Commissioner of Customs dated 31.3.2001 cannot be sustained for two  reasons
– (1) the mere existence of an alleged computer printout  is  not  proof  of
the existence of comparable imports; (2) assuming  such  a  printout  exists
and the contents thereof are true, the question still  remains  whether  the
transaction evidenced by the said computer printout are  comparable  to  the
transaction  of  the  appellant.   The  appellant  will  have  to  be  given
reasonable opportunity to establish (if he can) that  the  transactions  are
not comparable.

25.   The impugned order and the original assessment  order  are  therefore,
set aside.  However, it will be open to the respondent(revenue)  to  proceed
against the appellants herein  pursuant  to  the  show  cause  notice  dated
25.9.2000 in accordance with law.






26.   The appeals are allowed accordingly.

                                                               ………………………….J.
                                                                    (J.
Chelameswar)


                                                              ……………………..….J.
                                                               (A.K. Sikri)
New Delhi;
August 21, 2014

-----------------------
[1]      3.  Determination of the method of valuation – For the purpose of
these rules-
      (i) the value of imported goods shall be the transaction value.
[2]
      [3]   (ii)  if the value cannot be determined under the provisions of
clause (i) above, the value shall be determined by proceeding sequentially
through Rules 5 to 8 of these Rules.
[4]      (2)  The transaction value of imported goods under sub-rule(1)
above shall be accepted:

      Provided that-
      (a)  there are no restrictions as to the disposition or use of the
goods by the buyer other than restrictions which --

      (i)  are imposed or required by law or by the public authorities in
India;
                 Or
      (ii)  limit the geographical area in which the goods may be resold;
or
      (iii) do not substantially affect the value of the goods;

      (b)  the sale or price is not subject to same condition or
consideration for which a value cannot be determined in respect of the
goods being valued.

      (c)  no part of the proceeds of any subsequent resale, disposal or
use of the goods by the buyer will accrue directly or indirectly to the
seller, unless an appropriate adjustment can be made in accordance with the
provisions of Rule 9 of these rules; and

      (d) the buyer and seller are not related, or where the buyer and
seller are related, that transaction value is acceptable for customs
purposes under the provisions of sub-rule(3) below.


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