Holding

The Tribunal correctly applied Rule 4, accepted the declared price as the transaction value, and its findings were not perverse or irrational; therefore the appeals are dismissed.

Summary

The assignee imported an oil drilling rig and declared its CIF value for customs clearance. The Customs Commissioner rejected the declared price, deeming it under‑declared, and levied duty, penalty and confiscation, arguing that the buyer and seller were related parties and the price was therefore not the transaction value under Rule 4 of the Customs Valuation Determination Rules, 1988. The Customs, Excise and Service Tax Appellate Tribunal held that the declared price was the transaction value, relying on market data, expert affidavits and the fact that the parties’ relationship did not affect the price, and set aside the duty and penalties. On appeal, the Supreme Court examined the interpretation of Rule 4(1), the meaning of “payable”, and whether the Tribunal’s factual findings were perverse. It found that the Tribunal correctly applied the statutory scheme, that the revenue had accepted the declared price as the transaction value, and that the Tribunal’s findings were not irrational. Consequently, the Court dismissed the revenue’s appeals.

Issues considered

The correct interpretation of Rule 4(1) of the Customs Valuation Determination Rules, 1988, especially the meaning of ‘payable’ and its application to the particular transaction.
Whether a price declared by an importer can be accepted as the transaction value when the buyer and seller are related parties.
Whether the Tribunal’s factual findings on market fluctuations and expert evidence are perverse or irrational and thus liable to be interfered with.
Whether the revenue department’s stance that the declared price was not the transaction value was properly recorded and, if not, the appropriate remedy.

Legislation cited

Customs Act, 1962s. 111, s. 112(a), s. 130-E, s. 14(1), s. 14(1-A), s. 28AB
Territorial Waters, Continental Shelf, Exclusive Economic Zone and other Maritime Zones Act, 1976

Subjects

Customs valuationTransaction valueRule 4Related partiesOil rig importCustoms duty assessmentPenalty and confiscationAppellate review

Judgment

A COMMISSIONER OF CUSTOMS, MUMBAI
v.
M/S. BUREAU VERITAS AND ORS.

FEBRUARY 14, 2005

B [RUMA PAL, ARIJIT PASAYAT AND C.K. THAKKER, JJ.]

Customs Act, 1962-Customs Valuation Determination of Price of
Imported Goods Rules, 1988 :

c Rule 4-Transaction value of goods under~Determination of-Import
of oil rigs-Price declared, for payment of duty-Non-acceptance of price
paid by importer as value under - declared-Levy of duty and penalty-
Tribunal on basis of various materials held variation in price of rigs due to
fluctuations in prices as such declared price to be transaction value in terms
D of Rule 4 and set aside duty and penalty levied-On appeal, held: Material
referred by Tribunal relevant-Authenticity, credibility or reliability of·
documents not questioned-Hence, order of Tribunal not perverse or irrational
and calls for no interference-Constitution of Jndi~Articl'e 136.

Rule 4-Transaction value of goods under-Determination of-Held: It
E is the price actually paid for the particular transaction unless price is
unacceptable under Rule 4(2)-Use of definite article 'the' indicates value
accepted for assessment to custom duty- 'Payable' in context of Rule 4(1) is
to be read as referring to 'the particular transaction' and payability in respect
of the transaction envisages a situation where payment of price may be
deferred-Rules 5 to 8 prov/de for alternate modes of valuation, when
F transaction value under Rule 4 is rejected-Rules 5 to 8 and 3-/nterpretation
of Statutes.

Practice and Procedure :

Tribunal recorded agreement between parties on a point-Plea before
G Supreme Court by one of the parties taking different stand-Held: If there was
wrong recording by Tribunal, aggrieved party should approach the Tribunal
and not the Supreme Court.

Words and Phrases:
H 118
COMMR. OF CUSTOMS v. BUREAU VERITAS 119

'Payable '-Meaning of in the context of Rule 4(1) of the Customs A
Valuation Determination of Price of lmp~rted Good{ ~1/es, 1988.

Respondent no. 2 in Civil Appeal ''
; ; Nos. 808r810 of 2004 and sole

respondent in Civil Appeal No. 811 of 2004-assessee imported rig from a
foreign company to bring it to India for fulfillment of the contract with
ONGC. It declared the value of the rig for clearance on payment of duty. B
Manager of assessee's company and respondent No. 1 in C.A. Nos. 808-
810 of 2004-a marine inspecting agency certified the value of rig as the
price paid by assessee-importer to the foreign company, the seller. Revenue
found that the value of price was under declared and issued show cause
notice to the assessee. Ultimately Revenue found that the transaction value C
of the rigs in terms of Rules 4 of the Customs Valuation Determination of
Price of Imported Goods Rules, 1988 was the price paid for its purchase
but did not accept the declared value on the ground that the buyer-assessee
and the seller-foreign company were related parties both being subsidiary
of the same company and the seller had purchased the oil rig in its previous
sale at a price which was twice the price paid by assessee-importer and D .'
levied penalty and interest. Appeals were filed. Tribunal recorded that
both the assessee and Revenue agreed that the declared price is the
transaction value and relying on data of various publications and journals
and the report of the valuation expert, held that there were fluctuations
in prices of rig and as such the declared price would be the transactional E
value in terms of Rule 4. It allowed the appeal and set aside the duty and
penalty levied. Hence the present appeal.

Appellant-Revenue contended that the Tribunal merely relying on
the data available and the report of the valuation expert, could not have
held that the value disclosed was the market value; that Rule 4 has .F
application only when the transaction leads to import; and that the
Tribunal proceeded on the basis as if the Revenue accepted that the price
disclosed was the transaction value.

Respondent-assessee contended that the Tribunal arrived at the view
after taking into consideration all relevant aspects and the correct position G
in law; and that right from the stage of show cause notice Revenue's stand
was that the price indicated was the transaction value.

Dismissing the appeals, the Court

H
120 SUPREME COURT REPORTS (2005] 2 S.C.R.

A HELD : I. The Tribunal kept various requirements of the Customs
Valuation Determination of Price of Imported Goods Rules, 1988 more
particularly Rule 4 in view and evaluated the material facts in the
·background of applicable statutory provisions and legal principles. Various
materials referred to can ·by ·no stretch of imagination be termed as
B irrelevant. The authenticity, credibility or reliability of the data has not
been questioned by the Revenue. It also referred to the affidavit of experts.
The inference to be drawn from these materials falls within the domain
of factual determination. The conclusions of the Tribunal cannot be termed
as perverse or irrational and as such calls for no interference.
(127-D; 130-A)
c Collector of Customs, Bombay v. Swastic Woollens (P) Ltd and Ors.,
(1988) Supp. SCC 796; West Bengal Electricity Regulatory Commission v.
CESC Ltd, (2002) 8 SCC 715 and Commissioner of Customs, Chennai v.
Adani Exports Ltd and Anr., (2004) 4 SCC 367, referred to.

D 2.1. The Rules are framed under Section 14(1-A) of the Customs Act,
1962 and are subject to the conditions in Section 14(1). Rule 4 is in fact
directly relatable to Section 14(1). Both Section 14(1) and Rule 4 provide
that the price paid by an importer to the vendor in the ordinary course
of commerce shall be taken to be the value in the absence of any of the
special cfrcumstances indicated in Section 14(1) and particularised in Rule
E 4(2). (127-.FJ ·

2.2. Rule 4(1) speaks of the transaction value. Utilisation of the
definite article indicates that what should be accepted as the value for the
purpose of assessment to customs duty is the price actuali°y paid for the
particular transaction, unless of course the price is unacceptable for the
F reasons set out in Rule 4(2). 'Payable' in the context of the language of
Rule 4(1) must, therefore, be read as referring to "the particular
transaction" and payability in respect of the transaction envisages a
situation where payment of price may be deferred. Furthermore, Rule 4
is limited to the transaction in question is also supported by the provisions
G of the other rules, Rule 5 to Rule 8 each of which provide for alternate
modes of valuation and allow evidence of value of goods other than those
under assessment to be the basis of the assessable value. If the phrase "the
transaction value'; used in Rule 4 were not limited to the particular
transaction then the other Rules which refer to other transactions and data
would become redundant. It is only when the transaction value under Rule
H
COMMR. OF CUSTOMS v. BUREAU VERITAS 121

4 is rejected, that under Rule 3(ii) the value shall be determined by A
proceeding sequentially through Rules 5 to 8 of the Rules. Conversely, if
the transaction value can be determined under Rule 4(1) and does not fall
under any of the exceptions in Rule 4(2), there is no question of
determining the value under the subsequent rules. (127-G-H; 128-B-EI

Eic~er Tractor Ltd v. Commissioner of Customs, Mumbai, (2000) 122 B
ELT 321, relied on.
3. Revenue had accepted the declared price as the transaction value
right from the show-cause notice stage. In fact, the Tribunal recorded that
there was agreement on this issue. If there was no agreement as submitted
by the Revenue in the instant appeals and if there was wrong recording C
by the Tribunal, the procedure to be adopted is different. After having
agreed on the point as recorded, it is not open to the appellant to turn
round or take a plea that the position is different. If really there was no
agreement, the only course open to the appellant was to move the Tribunal.
(126-F-Gl D
State of Maharashtra v. Ramdas Shrinivas Nayak and Anr., (19821 2
SCC 463 and Bhavnagar University v. Pa/itana Sugar Mill Pvt. Ltd and Ors.,
(2002) AIR SCW 4939, relied on.

CIVIL APPEL LA TE JURISDICTION : Civil Appeal Nos. 808-811 of
2004. E:
From the Judgment and Order dated 30.6.2003 of the Customs Excise
and Service Tax Appellate Tribunal, West Zone Bench at Mumbai in A.No.
C/1344, 1348, 1349/2002 and C/108 of2003-mum in F.O. NO. C-11/1612-
15 of 2003-WZB.
F
A.K. Ganguli, Rupesh Kumar, P. Parmeswaran and Ms. Bamali Basak
for the Appellant.

D.A. Dave, Sanjiv Sen, A.T. Patra, Gautam Khaitan, Nipun Malhotra
for Mis. 0.P. Khaitan & Co., E.C. Agrawala, Mahesh Agrawal, Rishi Agrawal
and Ms. P. Dhanlakshmi for the Respondents. G
The Judgment of the Court was delivered by

ARIJIT PASAYAT, J. These four appeals by the Revenue have a
common matrix in the judgment of Customs Excise & Service Tax Appellate
H
122 SUPREME COURT REPORTS [2005} 2 S.C.R.

A Tribunal, West Zonal Bench at Mumbai (in short 'the Tribunal').
The factual backgr~~nd leading to the dispute as noted by the Tribunal
in essence is as follows :

Pride Foramer (the respondent no. 2 in Civil Appeal Nos. 80S-8IO of
B 2004 and sole respondent in Civil Appeal No. 811 of 2004) (hereinafter
referred to as the "assessee") was the owner of oil Well drilling rigs and drill
ships which it leased outto parties engaged in oil exploration or exploitation.
It entered into a contract with the Oil & Natural Gas Comrnissioh (in short
'ONGC') in January 1999 for lease to the latter of a jack-up rig of 300 ft
C depth to be utilized for oil exploration and exploitation off the coast of India.
The assessee was not originally owner of the rig, and in order to comply with
the tenns of the contract, purchased in March 1999 the rig Pride Pennsylvania >-
from Pride Global Limited, a company registered in the British Virgina Islands
at a price of US $ 17 millions. The rig was being deployed for off sea
exploration in accordance with the directions of the hirer, i.e. ONGC, and did
D not initially enter either Indian territorial wate~s or any areas of the e~clusive
economic zone designated under the Territorial Waters, Co.ntinental Shelf,
Exclusive Economic Zone and Other Maritime Zones Act, 1976 to which the
provisions of the Customs Act, 1962 (hereinafter referred to as 'the Act')
have been made applicable. In April 2000, the rig was required by the hirer
to enter one of such designated areas. On the belief that such entry would
E constitute import under the Act; assessee filed a Bill of Entry in Mayr2000
for the rig, declaring the C.l.F. value of the rig to be Rs. 783,439,838. The
Bill of Entry was accompanied by an invoice showing details of the value of
fixed and loose equipment, spares and consumables on the rig for a total
C.I.F. value of U.S. $ 17, 682, 690. The invoice was issued by the project _.
.....

F office in Mumbai of the assessee and signed by Jean Paul Rabier, its manager
in India (the respondent no. 3 in Civil Appeal Nos. 808-810 of 2004). The
rig was permitted to be cleared on payment of duty at the declared value.

Subsequently investigation by the department led it to conclude thatthe
valu.e of price was under declared and that the true value of the rig ought to
G be Rs. 1966,950,295. The rig was placed under seizure in September 2001
and ordered to be released provisionally by the Bombay High Court after
r
securing guarantees and deposits. Notice was issued proposing to enhance
the value of the rig as stated above, proposing its confiscation under clause
(m) of Section 111 of the Act on the ground that its value was misdeclared.
H Penalty was also proposed on the importer, Rabier and Bureau Veritas, a
COMMR. OF CUSTOMS v. BUREAU VERITAS [PASAYAT, .1.) 123
......... marine inspection agency, (respondent no. I in Civil Appeal Nos. 808-810 of A
2004) whose Singapore office had issued two reports in 1999 and 2000
certifying the value of the rig. The show-cause notice alleged that the values
certified by it were improper. After considering the cause shown and hearing
the parties, the Commissioner of Customs (Import) Mumbai (in short the
'Commission') passed the order which was impugned before the Tribunal.
He held the value of the rig to be Rs. 1451,893,375 (equivalent to US$ 32.78 B
million) and demanded differential duty of about Rs. 29.45 crores. He ordered
confiscation of the rig with an ·option to redeem it on payment of fine of Rs.5
crores, demanded interest on the differential duty, imposed penalties equal to
the duty on the company, Rs. 2 lakhs on Jean Paul Rabier and Rs. 2 lakhs
on Bureau Veritas. c
After confirmation of duty he directed appropriation of Rs. I 0 crores
against the same. Payment of interest@ 24% under Section 28 AB of the Act
was demanded from July 2000. Penalty of Rs. 29,45,19,057 was imposed and
separate penalties under section l 12(a) of the Act were imposed on Bureau
Veritas and Jean Paul Rabier. D
The Commissioner found that the transaction value in terms of Rule 4
'
of the Customs Valuation Determination of Price of Imported Goods Rules,
-
1988 (in short the 'Rules') of the rig was the price paid for its purchase in
March 1999 by the importer of US $ 17 millions. The purchase was made by
the assessee to bring the rig into India so that it could fulfill the contract that E
it signed in January of the year with ONGC._ He declined to accept the
declared value on the ground that the buyer, Pride.Former_and.seller, Pride

-- Global Ltd. were rell!.ted parties, each of them being a subsidiary company
of Pride International Inc. He noted that the rig was purchased in 1997 by
Pride International Inc from Cartier Shipping Co. at US $ 35.35 millions. He F
did not accept the report by Bureau Veritas issued in March 2000 valuing the
rig at US $ 17 millions on the ground that it has been arrived at without
taking into account the fact of _the earlier sale at US $ 35.35 millions. He
valued the rig by applying the rates of depreciation specified in the circular
F 4951/16/93-Cus Vof26.5.1993 of the Board at US$ 35.35 millions, taking
into account additional amounts which were subsequently spent on the rig. G

- Accordingly, he arrived at the assessable value of Rs. 145,lS,93,375 and
confirmed the demand for differential duty which was worked out at Rs.29.45
crores. The Commissioner held the importer - assessee guilty of suppression
of facts and misdeclaration of values. Bureau Veritas and Jean Paul Rabier
H
A
124 SUPREME COURT REPORTS [2005) 2 S.C.R.

were guilty of aiding'• and abetting assessee-importer. Accordingly,
Commissioner directed confiscation under Section l I 3(m) of the Act.
--
Before the Tribunal stand of assessee was that the Rules provide that
transaction value is not to be rejected solely on the ground of relationship
and unless it is shown that the relationship between the parties has influenced
B the price, transaction value has to be accepted even when the party to the sale
and purchase are related. Oil rigs are not traded frequently, and number of
such rigs available at a given time is limited. Most of the companies which
owned the rigs lease them out for oil exploration. As number of such owners
is limited, oil well· drilling is a specialized task. The value of rigs mostly
C depends upon the day-rates. Whenever oil prices go up due to any reason,
there is increase in exploitation of existing oil reserve and exploration for
new field. At the relevant point of time the prices ofoil fell to very low level
in 1999. from the high level in 1997. That explains the substantial difference
between the price paid for the rig in 1997 and 1999. Reference was made to
a certificate obtained from a reputed ship broker in Paris who had indicated
D price to be between US $ 15 to 17 millions. The fact that rig was insured for
US$ 18 millions also shows that the transaction value was not influenced by
the relationship. Further, even if the depreciated value has tO be worked out
as done by the Commissioner, original value was to: be taken. The counsel
for the valuer submitted that the certificate was given after due verification
E and ina/a fides are not involved.

Revenue's stand on the other hand was that it has not been established
by the importer that the transaction value was not· influenced by the
relationship. The drop of the price ca.mot be explained merely by changes in
oil price.
F
The appeals against the order of the Commissioner filed by these persons
and by the Commissioner were disposed of by the impugned order.

The Revenue also preferred an appeal against that part of the
Commissioner's order by which the proposed additions for alleged value
G additions were rejected.

The Tribunal noted that both Revenue and the assessee agreed that the -
declared price is the transaction value and they also agreed that the seller of
the rig and ihe purchaser were related. Therefore, the only issue, to be
adjudicated was whether the transaction value is to' be accepted and, if not,
H
- COMMR. OF CUSTOMS v. BUREAU VERITAS [PASAYAT. J.)

by what method ~f assessment value of the rig has to be determined. After
125

referring to various rules the Tribunal referred to data indicated in reputed
publications indicating periodical change of value of rigs. After noticing
A

various details the Tribunal came to the conclusion that there were noticeable
fluctuations in prices and there were sometime violent fluctuations. With
reference to day-rates, it came to hold that there was a relationship between a
day-rates and the price of the oil rigs. Particular reference was made to two
publications i.e. the Bassoe Offshore Monthly, published by Bassoe Offshore
Consultants, Edinburg, Scotland and Offshore Drilling Monthly published by
Jeferies and Company Inc. with offices Worldwide. The Bassoe Offshore
Monthly of March 1999 had published a table of changing values of rigs,
which was referred to by the Tribunal. It was noted that the relevant data C
were produced before the Commissioner, but he did not accept them, by
introducing the concept of "value in exchange" and "value in use". It was
noted that the two aspects were difficult to understand and the Commissioner
or the departmental representative did not cast any doubt on the accuracy or
reliability of the publications and on the other hand relied upon them to
discard the assessee's case. It was held that there was considerable substance D
in the assessee's stand. Reference was also made to the affidavits of one Mr.
Gavin M.J. Strachan who was considered to be an expert on the valuation
aspect. According to the Tribunal, the affidavit of Mr. Gavin M.J. Strachan
showed that day-rates fluctuate depending on the supply of and demand for
a particular type of rig and the value go up and down accordingly. Accordingly, E
it was held that the prices of rigs of different types dropped by 50% or more
between 1997 and 1999. The explanation offered by the assessee for th, 50%
drop in prices merited acceptance. Accordingly it was held that there was
enough evidence to justify the view that sale of rig in 1999 was uninfluenced
by the relationship between buyer and the seller. The price, therefore, would
be the transaction value in terms of Rule 4. With reference to various materials F
it was also noted that even if the depreciation method is adopted, die
computation as done by the Commissioner was not correct one. Accordingly,
the appeals were allowed and the duty and penalty imposed, interest charged
were set aside.

In support of the appeal Mr. A.K. Ganguli, learned senior counsel G
submitted that the approach of the Tribunal is clearly erroneous. It proceeded
on the basis as if the Revenue accepted that the price disclosed was the
transaction value. It was really not so. The Commissioner indicated reasons
as to why the price indicated was not transaction value. Further, merely
H
126 SUPREME COURT REPORTS [2005] 2 S.C.R.

A relying on the data available from the journals and' publications and the
affidavit of Mr. Strachan, it could not have been held that the value-disclosed
was the market value. The Commissioner had noted that at different poi_nt of
time in the bid documents of higher values were shown and nothing has been
indicated as to what was the need for sell by Pride Global Limited and if the
assessee had indicated the p~fce to -be US $ 27 'millions, how it -became 17
B a
millions us dollars within period of25 days. it has not been indicated what
was the need for sale and purchase -of rig between two ·related persons. Rule
4 has application only when the transaction leads to import. Therefore, h was
not a case of transaction -value and the Tribunal's view -cannot be sustained.

C In response, Mr. Dushyant A. Dave learned counsel for the assessee-
respondent submitted that right from the. show-cause notice_ stage stand of the
Department was that the price indicated was the transaction value which was
not to be accepted because the transactions were related. The assessee could
not have benefit~d 'by sho;,irig a l~~ser figure when the customs. duty w'as
0

payable by ONGC:""lt was' rfot~the-=-tru;e-of"Revenue thar ONGC-and the
D assesse·~·-colluded to sho~-a-iesser figure:· A.s a matter of fact," the various
circumstances like the irisurartce cov·erage, agreement 'of ONGC to ·pay the
duty as assessed by the authorities clearly rule out any collusion. Admittedly,
this was not treated as .a..case. of under-vaiuaticin, There w~re several bids
invited by ONGC andJinaity o~ negotiati~ns the rates- were fixed. The view
E taken.by itie-T~ibunal has-been',arrive(at after taidng in_tocon;ideration all
relevant aspects, keeping in view t~e correct position in law. That being so,
there is no scope for i~te!ference. in these appeals .
. .~ '•. I

Though there is. amount" of controversy as to whether. the Department
accepted the de~lar~d price' as the t;ansaction value, and fixed the higher
F price because of rei;tio~ship, it is not necessary to .go i~to that aspect in
detail. Suffice it to say-that right from. the show~cause notice. stage same was.
the stand the Revenue had adopted. In fact, the Tribunar recorded there was
agreement on this issue: If 'there was no agreement as contended by the
revenue in the present appeals and if there ·was wrong recording by the
Tribunal, the procedure to be adopted is different
G
After having agreed on some point as recorded, it is not open to the
appellant to turn round or take a plea that the. position is different. If really
there was no agreement; the only c·ourse .open. to the ,appellant was .to move
the Tribunal in line with what has been said in- State of Maharashtra v.

H
Ram~as Shrinivas Nayak and Anr.', [1982] 2 SCC 463. In a recent decision
COMMR. OF CUSTOMS v. BUREAU VERITAS (PASA YAT . .I.] 127

Bhavnagar University v. Politano Sugar Mill Pvt. Ltd. and Ors., (2002) AIR A
sew 4939 the view in the said case was reiterated by observing that statements
of fact as to what transpired at the hearing, recorded in the judgment of the
Court, are conclusive of the facts so stated and no one can contradict.such
statements by affidavit or other evidence. If a party thinks that the happenings
in Court have been wrongly recorded in a judgment, it is incumbent upon the B
party, while the matter is still fresh in the minds of the Judges, to call the
attention of the very Judges who have made the record. That is the only way
to have the record corrected. If no such step is taken, the matter must
necessarily end there. It is not open to the appellant to contend before this
Court to the contrary.

It appears that the Tribunal kept various requirements of Rules more
c
particularly Rule 4 in view and proceeded to assess and examine the materials
brought on record. It placed reliance on the evidence adduced by the assessee
with reference to various journals the acceptability and the credibility of
which was never questioned by the Revenue. It also referred to the affidavit
of experts. D
The ambit and method of Rule 4 was elaborately dealt with by this
Court in Eicher Tractors Ltd v. Commissioner of Customs, Mumbai, (2002)
122 ELT 321.

It is true that the Rules are framed under Section 14(1-A) and are E
subject to the conditions in Section 14(1). Rule 4 is in fact directly relatable
to Section 14(1). Both Section 14(1) and Rule 4 provide that the price paid
by an importer to the vendor in the ordinary course o.f commerce shall be
taken to be the value in the absence of any of the special circumstances
indicated in Section 14(1) and particularised in Rule 4(2).
F
Rule 4( I) speaks of the transaction value. Utilisation of the definite
article indicates that what should be accepted as the value for the purpose of
assessment to customs duty is the price actually paid for the particular
transaction, unless of course the price is unacceptable for the reasons set out
in Rule 4(2). "Payable" in the context of the language of Rule 4(1) must, G
therefore, be read as referring to 'the particular transaction' and payability in
respect of the transaction envisages a situation where payment of price may
be deferred.

That Rule 4 is limited to the transaction in question is also supported
H
128 SUPREME COURT REPORTS [2005] 2 S.C.R.

A by i the provisions of the other rules each of which provide for alternate
modes of valuation and allow evidence of value of goods other than those
under .assessment to be the basis of the assessable value. Thus, Rule 5 allows
for. the transaction value to be determined on the basis of identical goods
imported intoJndia at the same time; Rule 6 allows for the transaction value
to be-determined on the value of similar goods imported into India at the
B·-1 same time as the subject goods. -Where there are no contemporaneous imports
into.India, thervalue is to be determined under Rule 7 bya process of deduction
in. the manner .provided therein. If this is not possible the_ value is to be
computed under, Rule 7·A. When value of the importe<J goods cannot be
determ_ined under any of these provisions, the value is required to be
C) determined under Rule 8 "using reasonable means consistent with the principles
and general' provisions of th_ese Rules and sub·section ( l) of Section 14 of th_e
Customs Aci,i 1962 and on the basis of data available in India". If the phrase
"the <transactiori 'value" used in Rule 4 were not limited to the particular
transacticiri-'then•the other rules which refer to other trarisacticins and data
would 1 become· redundant.
Di
It is only when the transaction value under Rule 4 is rejected, that
under Rule-3(ii)the value shall be determined by the proceeding sequentially
through Rules•5:to 8 of-the Rules. Conversely, if the transaction value can
be determined under Rule 4(1) and does not fall under any of the exceptions
E 1 ~:l~:.l_e1 ~(2); ther~ i~:~-?: ~uestion of determining the value under the subsequent
:,, • .. ~' •" .1 ! I t > ,1 ,; '

1 _, '1The scope:for interference with findings recorded by the Tribimal if it
has kept in view the correct 'legal position, has been dealt with by this Court'
in many cases! The· position was illuminatingly stated by this Court in Collector
FI of Customs, Bombay ·v. Swastic Woollens (P) Ltd and Ors., [1988] Supp
sec 796 as follow :
., ~- · Ir .· J h . .- , .. l > ,!.,
"' _ --'~'9:--The expression -"wool wastes" is not defined in the relevant
·~ .. ,. :Act or. in the 'notification, -This expression is not an expression of art.
1-..-lt may,be··understood,·asr.in most of financial measures where the
G; • ' expressions are not defined, not in a technical or preconceived basis
but on the basis.of trade understanding of those who deal with these
, r., •goods· as mentioned' hereinbefore. The Tribunal proceeded on that :
basis. The Tribunal has not ignored the Technical Committee's
observations. We have noted in brief the Tribunal's handling of that
- report.' The Tribi.11fal has neither ignored the observations of CCCN
H
COMMR. OF CUSTOMS v. BUREAU VERITAS [PASAYAT. J.] 129

nor the Board's Tariff Advice. These observations have been examined A
in the light of the facts and circumstances of the case. One of the
basis factual disputes was long length of sliver tops. Having regard
to the long length, we find that the Tribunal was not in error. Whether
a particular item and the particular goods in this case are wool wastes,
should be so considered or not is primarily and essentially a quest\on B
of fact The decision of such a question of fact must be arrived at
without ignoring the material and relevant facts and bearing in mind
the correct legal principles. Judged by these yardsticks the finding, of
the Tribunal in this case is unassailable. We are, however, of the viyw
that if a fact finding authority comes to a conclusion within the above
parameters honestly and bona fide, the fact that another authority be C
it the Supreme Court or the High Court may have a different
perspective of that question, in our opinion, is no ground to interf~re
with that finding in an appeal from such a finding. In the new scheme
of things, the Tribunals have been entrusted with the authority and
the jurisdiction to decide the questions involving determination of the
rate of duty of excise or to the value of goods for purposes pf D
assessment. An appeal has been provided to this Court to oversee that
the subordinate tribunals act within the law. Merely because another
view might be possible by a competent court of law is no ground for
interference under Section 130-E of the Act though in relation to the
rate of duty of customs or to the value of goods for purposes of E
assessment, the amplitude of appeal is unlimited. But because the
jurisdiction is unlimited, there is inherent limitation imposed in su€h
appeals. The Tribunal has not deviated from the path of corre~t
principle and has considered all the relevant factors. If the Tribunal
has acted bona fide with the natural justice by a speaking order, in
our opinion, even if superior court feels that another view is possible, F
that is no ground for substitution of that view in exercise of pow~r
under clause (b) of Section 130-E of the Act."

The position was reiterated in West Bengal Electricity Regu/ato~
Commission v. CESC ltd., [2002] 8 SCC 715 and Commissioner of Customs, G
Chennai v. Adani Exports ltd. and Anr., [2004] 4 SCC 367. ,

In the instant case Tribunal has referred to various materials which ca11
by no stretch of imagination be termed irrelevant. The authenticity, credibility
or reliability of the data has not been questioned. The inference to be drawn
from these materials falls within the domain of factual determination. The H
130 SUPREME COURT REPORTS [2005) 2 S.C.R.

A conclusions of the· Tribunal cannot be termed as perverse or irrational. The
evaluation of niat~rial facts has been done in the background of applicable
statutory provisions and legal principles.

The inevitable· conclusion is that no interference is called· for in these
appeals and they deserve to be dismissed. We di_rect accordingly. Costs made
B easy.

N.J. ·\·
Appeals dismissed.

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