M/S COMMERCE INTERNATIONALversusCOLLECTOR OF CUSTOMS

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                                    MIS COMMERCE INTERNATIONAL                                    A
                                                 v.
                                        COLLECTOR OF CUSTOMS

                                               MARCH 29, 1995

                                       [R.M. SAHA! AND S.C. SEN, JJ.]                             B

                          Customs Valuation Rules: Rule 3(a)(b ).

     --<                 Import of toners-Custom clearance fo,-{)ec/aration of value-Non-
                  submission of price list by importer-Reliance by Customs on price list
                  obtained from manufacture,-{)etermination of value under Rule 3(a)-Held
                                                                                                  c
                  valid.

                         The appellant imported 125 cartons of toners and filed a bill of entry
                  for their clearance declaring their value on the basis of invoice-cum-value
                  and country of origin certificate Issued by the trading company. It did not     D
                  file the price list of goods imported as asked by the Department, stating
                  that the trading company was not willing to reveal the source of supply.
                  Constquently, the Customs Department obtained the price list from
      '           manufacturer and relying upon the same determined the value of goods
                  under Rule 3(b) of Customs Valuation Rules holding that It was a case in
                  which rule 3(a) could not be applied. On appeal the Tribunal upheld the         E
                  valuation made under Rule 3(b). Hence this appeal by the importer.

                          Dismissing the appeal, this Court

                        HELD: The determination under rule 3(b) of the Customs Valuation
                  Rules could be undertaken if the valuation could not be determined under        F
                  clause(a). The authorities found that In the nature of goods Imported by
                  the appellant the valuation of It could not be determined under rule 3(a).
                  Therefore, rule 3(b) was rightly Invoked. The determination having been
                  done .on comparable goods offered for sale .in competitive conditions In
                  countries outside India the order does not suffer from a1_1y error of law.
                                                                                      [71-B)      G
                          CIVIL APPELLATE JURISDICTION : Civil Appeal No. 2198 of
                  1988.
      J
                       From the Judgment and Order dated 11.5.88 Central Excise and
                  Customs and Gold {Control) Appellate Tribunal, New Delhi in A.No.               H
                                                69
    70                   SUPREME COURT REPORTS                  (1995) 3 S.C.R.
A C.3088/87-A
          Rajiv Dutta and Vipin Nair for the Appellants.                          )-


         Dr. R.R. Mishra, R.B. Mishra for P. Parmeswaran with him' for the
    Respondent.
B
          The following Order of the Court was delivered :

         The only question that arises for consideration in this appeal is
    whether the Tribunal was justified in applying Rule 3(b) of the Customs
    Valuation Rules framed under Section 14 of the Customs Act.
c
        The appellant filed a Bill of Entry for clearance of 125 cartons of
  toners declaring the value of the goods at a particular amount on the basis
  of invoice-cum-value and country of ongin certificate issued by M/s. Sangill
  Ltd. Since the seller was not a manufacturer the Department required the
D appellant to furnish the price list of the goods under import but the
  appellant instead of filing the price list stated that they had purchased the
  goods from a trading company which was not willing to reveal the sol!rce
  of supply. Consequently, the Department obtained export price list from
  M/s. Coates Electrographics Limited. After examining the price list of Mis
  Coates Electrographics Ltd., the Collector was of the opinion that it was
E a case in which rule 3(a) could not be applied. Therefore, he proceeded
  to determine the value under rule 3(b) and on the price list supplied by
  the manufacturer the valuation of the toner imported by the appellant was
  determined. It was held that the value of the goods when compared with
  manufacturer's price list was much below the nonnal price in the interna-
F tional market. The goods were directed to be confiscated with an option
  to clear on Rs. 8 lakhs. Penalty of Rs. 1000 was also imposed. Against this
  order the appellant approached the Tribunal. The Tnbunal found that the
  Collector did not commit any error in applying rule 3(b) but reduced the
  redemption fine from Rs. 8 lakhs to Rs. 5 lakhs. The penalty of Rs. 1,000
  was maintained.
G
        Section 14(1)(b) of the Customs Act empowers the appropriate
  authority to determine the value of the imported goods in accordance with
  provisions contained in rules 3 to 8. Rule 3(a) provides for determination      ),.


  of value of such goods, with comparable goods produced or manufactured
H and ordinarily sold or offered for sale to other buyers in India under
    COMMERCE INTERNATIONAL v. COLLECTOR OF CUSTOMS                         71
competitive conditions. Rule 3(b) permits the proper officer to determine A
valuation on the export price at which such goods or comparable goods
are ordinarily sold or offered for sale under competitive conditions to
huyers outside India. The determination under rule 3 (b) could be under-
taken if the valuation could not be determined under clause (a). The
authorities found that in the nature of goods imported by the appellant the
valuation of it could not be determined under rule 3(a). Therefore, rule B
3(b) was rightly invoked. And the determination having been done on
comparable goods offered for sale in competitive conditions in countries
outside India the order does not suffer from any error of law. The Tribunal
further did not commit any error in relying on the price list supplie4 by
the manufacturer as compared to trading company which refused to C
diwlgc the name of the mannfacturer.

      In the result, this appeal fails and is accordingly dismissed. But there
shall be no order as to costs.
T.NA                                                      Appeal dismissed.