Supreme Court of India
M/S. VARSHA PLASTICS PVT. LTD. & ANR.versusUNION OF INDIA & ORS.
- Citation
- 2009 INSC 109
- Decided
- 5 February 2009
- Disposal
- Dismissed
- Bench
- MARKANDEY KATJU
Holding
The Standing Order is a valid, non‑binding guideline that does not interfere with the assessing authority’s quasi‑judicial discretion in determining customs value.
Summary
Varsha Plastics Pvt. Ltd. imported a consignment of LDPE/HDPE granules from the United States and declared a low invoice price. The Customs Authority rejected the transaction value as unrealistically low, enhanced the valuation using prices from foreign journals as directed by Standing Order No. 7493/99, confiscated the goods and imposed a penalty. The importer challenged the constitutional validity of Section 151A of the Customs Act and the legality of the Standing Order, arguing that it compelled the assessing authority to disregard the actual transaction value. The High Court held that the Standing Order is merely a set of non‑binding guidelines to assist the assessing authority and does not infringe its quasi‑judicial discretion. The Supreme Court affirmed this view, stating that the Order does not interfere with the authority’s independent valuation function and that reference to foreign journals is permissible when the transaction value is rejected. Consequently, the appeals were dismissed.
Issues considered
- The validity and binding nature of Standing Order No. 7493/99 issued under Section 151A of the Customs Act, 1962.
- Whether the Standing Order interferes with the quasi‑judicial discretion of the assessing authority in customs valuation.
Legislation cited
- Customs Act, 1962s. 14, s. 151A, s. 156
- Customs Tariff Act, 1975
- Customs Valuation (Determination of Price of Imported Goods) Rules, 1988s. 11, s. 2(f), s. 3, s. 4, s. 5, s. 6, s. 7, s. 8
Subjects
customs valuationstanding orderSection 151Atransaction valueforeign journalquasi‑judicial discretioncustoms dutymis‑declaration
Judgment
[2009) 1 S.C.R. 896
A M/S. VARSHA PLASTICS PVT. LTD. & ANR. ~-
v.
UNION OF INDIA & ORS.
(Civil Appeal Nos. 835-836 of 2002)
FEBRUARY 5, 2009
B
[MARKANDEY KATJU AND R.M. LODHA, JJ.]
Customs Act, 1962 - s. 151A - Standing Order No.
7493199 dated 3. 12. 99 issued by Chief Commissioner of
c Customs - Giving guidelines and directions for determination
of valuation of plastic items, in the light of international prices
contained in foreign journals - Validity of - Held: Valid - The
Standing Order is not binding and has to be taken only as
an assistance in exercise of quasi judicial power of
D determining value for the purpose of levy of customs duty -
It does not interfere with quasi-judicial function - Valuation of
goods generally should be on the basis of customs valuation
Rules and contemporaneous import - But if evidence as
regards contemporaneous import not available, reference to
E foreign journal to find out international price is not irrelevant
- Customs Valuation (Determination of Price of Imported
Goods) Rules, 1988 - r. 4.
The question for consideration in the· present
appeals was legality and validity of Standing Order No.
F 7493199 dated 3.12.1999 issued by Chief Commissioner "
of Customs, whereby detailed guidelines and directions
had been given for determination of valuation of plastic
items in the light of international prices contained in the
foreign finance journals. The Order also contained
G directions as to how classification of mixed material like
floor sweeping should be made.
Dismissing the appeals, the Court
H 896
VARSHA PLASTICS PVT. LTD. & ANR. v. UNION OF 897
INDIA & ORS.
~- HELD: 1. The Standing Order No. 7493/99 dated A
3.12.1999, in any manner does not interfere with the
independent quasi-judicial function to be discharged in
the assessment of duty by the Assessing Officer. The
High Court rightly held that the Standing Order is to be
taken only as an assistance in exercise of the quasi- 8
judicial power of determining value for the purpose of
levying of customs duty. As a matter of fact, it is the case
......
of the Department as well that the Standing Order is not
binding, it is just in the nature of guidelines to streamline
the functioning of Customs Officers at various field c
formations. According to the Department, the impugned
Standing Order was issued for the smooth functioning of
assessment and examination work and to bring about
uniformity in the work and it prescribes only pattern of
assessment and in no way, interferes with the discretion D
.):
of the Assessment Authority. In view of the categorical
stand of the Department, the impugned Standing Order
has to be read and understood accordingly. [Para 20)
[909-D-H; 910-A]
2. Once transaction value is rejected on valid E
grounds, the Customs Authority has to proceed to
determine the value of goods by following Customs
Valuation Rules and on the basis of contemporaneous
.i( import. However, in the absence of any. evidence with
regard to contemporaneous import, reference to foreign F
journals that may indicate the correct international price
for the purposes of Section 14 of Customs Act, 1962, may
not be irrelevant and reliance upon such journdl cannot
be said to be altogether unreasonable. As to whether in
a given case such foreign journal or for that matter G
PLATT's Price Report indicate correct international price
~ of the concerned goods for the purpose of Section 14(1)
would depend on facts of each case and that would be
for the department to establish. [Para 21) [910-B-E]
3. Paragraph 7 of the impugned Standing Order H
898 SUPREME COURT REPORTS (2009) 1 S.C.R.
A which provide as to how classification of mixed waste ~
material like floor sweeping should be made also has to
be read only as guidelines to the Assessing Authority.
The Assessing Authority in his quasi-judicial function has
to take independent view in this regard as well. [Para 22]
B [911-B]
Eicher Tractors Ltd. Haryana vs. Commissioner of
Customs, Mumbai 2001 (1) SCC 315; Rabindra Chandra ...
Paul vs. Commissioner of Customs (Preventive) Shillong
2007 (3) SCC 93; Commissioner of Customs, Calcutta vs.
c South India Television (P) Ltd. 2007 (6) SCC 373; Orient
Paper Mills Ltd. vs. Union of India AIR 1970 SC 1498;
Collector of Customs, Bombay vs. Shibani Engineering
Systems, Bombay 1996 (10) SCC 42; Padia Sales
Corporation vs. Collector of Customs 1993 Supp. 4 SCC 57;
D Basant Industries Nunhai, agra vs. Additional Collector of
-(
Customs, Bombay 1995 Supp 3 SCC 320 and Sharp
Business Machines vs. Collector of Customs 1991 (1) SCC
154, referred to.
E Case Law Reference:
2001 (1) sec 315 Referred to Para 7
2001 (3) sec 93 Referred to Para 7
2001 (6) sec 373 Referred to Para 7 )<
F
AIR 1970 SC 1498 Referred to Para 7
1996 (10) sec 42 Referred to Para 13
1993 Supp. 4 sec 57 Referred to Para 14
G
1995 Supp 3 sec 320 Referred to Para 14
1991 (1) sec 154 Referred to Para 14
CIVIL APPELLATE JURISDICTION : Civil Appeal Nos.
835-836 of 2002.
H
VARSHA PLASTICS PVT. LTD. & ANR. v. UNION OF 899
INDIA & ORS.
~ From the final Order and Judgment dated 4.4.2001 and A
25.4.2001 of the High Court of Gujarat at Ahmadabad in S.C.A.
No.13384 of 2000 and M.C.A. No. 795 of 2001 respectively.
Meenakshi Arora for the Appellants.
K. Radhakrishnan and G. Prakash (for B. Krishna Prasad) B
for the Respondents.
-+
The Judgment of the Court was delivered by
R.M. LODHA, J. 1. These two appeals by special leave
are directed against the judgment and order of the High Court
c
of Gujarat disposing of Special Civil Application and
Miscellaneous Application for review.
2. The first appellant M/s Varsha Plastics Pvt. Ltd., is
-it engaged in the business of importing various goods like plastic D
materials. They imported a consignment of 18.45 metres of
LDPE/HDPE mix granules/powder (floor sweeping) from USA
in the month of July, 2000. These goods are claimed to have
been purchased from M/s Pexim International of USA under
Invoice No. 2827 at the total price of US $ 4151.25. The E
importer declared these goods as freely importable item under
para 5.1. of the EXIM Policy 1997-2000. The goods were
subjected to examination. Some of these goods were found to
,i.._ be mis-declared goods in terms of value and some were found
mis-declared in terms of description, value and quality. In view F
of mis-declaration of goods in terms of description and value,
the Customs Authority was of the view that these were liable
to be confiscated and importer was liable for penal action. A
show cause notice was sought to be given but the importer
waived issuance of show cause notice and personal hearing.
G
The Additional Commissioner of Customs, Kandla vide order
:Ii in original dated 29.11.2000 rejected the invoice price as was
found to be very low as compared to prevalent international
market price and in view of mis-declaration of goods in terms
of value and description, enhanced the value of the goods for
H
900 SUPREME COURT REPORTS [2009) 1 S.C.R.
A the assessment purpose as set out in the order. The Additional
Commissioner of Customs ordered confiscation of under-
invoiced goods as well as goods mis-declared in description
but gave an option to the importer to redeem the same by
payment of fine. In his order, the Additional Commissioner of
B Customs, Kandla also imposed a personal penalty of Rs.
2,50,000/- on the importing firm and its directors.
3. The present appellants, instead of assailing the order
in original in a statutory appeal approached the High Court of
Gujarat by filing a Special Civil Application inter alia
c challenging the constitutional validity of the provision of Section
151 A of The Customs Act, 1962 (for short 'the Act' ) and also
put in issue the legality and validity of the Standing Order No.
7493/99 issued by the Chief Commissioner of Customs,
Mumbai with regard to valuation of plastic items.
D -4.
4. It appears that few other Special Civil Applications
raising identical issues were pending before the High Court of
Gujarat. These Special Civil Applications were heard together
by the Division Bench and disposed of vide Order dated
E 04.04.2001. The Division Bench did not find any merit in so far
as the constitutional validity of Section 151A of the Act was
concerned. As regards the power of the Chief Commissioner
of Customs to issue the impugned Standing Order to the
subordinate Assessing Authorities on the question of
assessment of value of the concerned goods for imposing
F
customs duty, the Division Bench held that the impugned
Standing Order was not rigid direction or mandate but was only
instructions containing flexible guidelines. The High Court held
that the impugned Standing Order is to be taken only as
assistance in exercise of quasi-judicial power of determining
G the value for the purpose of levy of customs duty by the
concerned authorities. Having read down the Standing Order,
the High Court held that the impugned Standing Order was not
liable to be struck down.
H 5. An application seeking review of the order dated
VARSHA PLASTICS PVT. LTD. & ANR. v. UNION OF 901
INDIA & ORS. [R.M. LODHA, J.]
-+-- 04.04.2001 was made by the present appellants which came A
to be disposed of on 25.04.2001. It is from these orders that
these two appeals arise.
6. In view of the limited leave granted by this Court, the
controversy in these appeals is confined to the legality and B
validity of the Standing Order No. 7493/99.
.~
7. Ms. Meenakshi Arora, learned counsel, appearing for
the appellants, relying upon a decision of this Court in the case
of Eicher Tractors Ltd., Haryana vs. Commissioner of
Customs, Mumbai (2001) 1 SCC 315, strenuously urged that c
the transaction value i.e., price actually paid for imported
materials alone can be considered to be the assessable value
and, therefore, the impugned Standing Order which directed the
assessing authorities to discard such transaction value and
take the price published in magazine like PLATT's Weekly D
Report, as the assessable value was unsustainable in law. The
learned counsel referred to two more decisions of this Court
viz., (1) Rabindra Chandra Paul vs. Commissioner of Customs
(Preventive) Shillong (2007) 3 SCC 93; (2) Commissioner of
Customs, Calcutta vs. South India Television (P) Ltd. (2007) E
6 SCC 373 wherein Eicher Tractors has been followed. In
challenging the Standing Order as invalid and ultra vires, the
learned counsel submitted that no instructions could be issued
as to how assessable value of imported goods should be
determined and as to how a consignment of waste like floor F
sweepings should be classified. She placed reliance on Orient
Paper Mills Ltd. vs. Union of India, AIR 1970 SC 1498.
8. Before we advert to the impugned Standing Order, it
would be appropriate to refer to few provisions of law, relevant
for the purposes of the controversy raised in these appeals. G
#:ii 9. Section 14 of the Act provides for valuation of goods
for purposes of assessment which reads thus:-
Valuation of goods for purposes of assessment- (1) For H
902 SUPREME COURT REPORTS [2009] 1 S.C.R.
A 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,
8 or offered for sale, for delivery at the time and place of
importation or exportation, as the case may be, 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;
c [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;]
D
[(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.]
E
(2) Notwithstanding anything contained in sub-section (1)
[or sub-section (1A)] if the Central Government is satisfied
that it is necessary or expedient so to do it may, by
notification in the Official Gazette, fix tariff values for any
class of imported goods or export goods, having regard )l
F to the trend of value of such or like goods, and where any
such tariff values are fixed, the duty shall be chargeable
with reference to such tariff value.
(3) For the purposes of this section -
G
(a) "rate of exchange" means the rate of exchange-
(i) determined by the Central Government, or
"''
(ii) ascertained in such manner as the Central
H Government may direct,
VARSHA PLASTICS PVT. LTD. & ANR. v. UNION OF 903
INDIA & ORS. [R.M. LODHA, J.]
for the conversion of Indian currency into foreign currency A
---+-- or foreign currency into Indian currency;
(b) "foreign currency" and "Indian currency" have the
meanings respectively assigned to them in clause (m) and
clause (q) of section 2 of the Foreign Exchange Regulation B
Act, 1973 (46 of 1973)
10. Section 151A empowers the Board to issue orders,
~-
instructions and directions to officers of Customs for the
purpose of uniformity in the classification of goods or with
respect to levy of duty thereon. The said provision is as follows:- c
[151A. Instructions to officers of customs - The Board
may, if it considers it necessary or expedient so to do for
the purpose of uniformity in the classification of goods or
with respect to the levy of duty thereon, issue such orders, D
instructions and directions to officers of customs as it may
deem fit and such officers of customs and all the other
persons employed in the execution of this Act shall observe
and follow such orders, instructions and directions of the
Board:
E
Provided that no such orders, instructions or
directions shall be issued -
(a) so as to require any such officer of customs to
make a particular assessment or to dispose of a F
particular case in a particular manner; or
(b) so as to interfere with the discretion of the
Commissioner of Customs (Appeals) in the
exercise of his appellate functions.]
G
11. Section 156 of the Act empowers the Central
, '>i Government to make rules consistent with the Act for carrying
out its purposes. In exercise of the power conferred by Section
156 of the Act read with Section 22 of the General Clauses Act,
1896, the Central Government has made the rules called the H
904 SUPREME COURT REPORTS (2009] 1 S.C.R.
A Customs Valuation (Determination of Price of Imported Goods)
Rules 1988 (for short 'Customs Valuation Rules'). Rule 2(f)
defines inter-alia transaction value, the value determined in
accordance with Rule 4 of the Rules. Rule 3 and 4 of the
Customs Valuation Rules read thus :-
B
3. Determination of the method of valuation- For the
purposes of these rules, -
(i) the value of imported goods shall be the transaction
value;
c
(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.
D 4. Transaction value - (1) 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 of these rules.
E (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
F 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
G
(ii) limit the geographical area in which the
goods may be resold; or
(iii) do not substantially affect the value of the
goods;
H
VARSHA PLASTICS PVT. LTD. & ANR. v. UNION OF 905
INDIA & ORS. [R.M. LODHA, J.]
......... (b) the sale or price is not subject to same condition A
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 B
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
c
(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.
(3) (a) Where the buyer and seller are related, the D
transaction value shall be accepted provided that the
examination of the circumstances of the sale of the
imported goods indicate that the relationship did not
influence the price.
(b) In a sale between related persons, the transaction E
value shall be accepted, whenever the importer
demonstrates that the declared value of the goods being
valued, closely approximates to one of the following values
ascertained at or about the same time -
F
(i) the transaction value of identical goods, or of
similar goods, in sales to unrelated buyers in India;
(ii) the deductive value for identical goods or similar
goods;
G
(iii) the computed value for identical goods or similar
goods.
Provided that in applying the values used for
comparison, due account shall be taken of H
906 SUPREME COURT REPORTS [2009] 1 S.C.R.
A demonstrated difference in commercial levels, ·~
quantity levels, adjustments in accordance with the
provisions of Rule 9 of these rules and cost incurred
by the seller in sales in which he and the buyer are
not related;
B
(c) substitute values shall not be established under
the provisions of clause (b) of this sub-rule.
12. Section 14(1) of the Act prescribes a method for
determination of the value of the goods. It is a deeming
C provision. By legal fiction incorporated in this Section, the value
of the imported goods is the deemed price at which such or
like goods are ordinarily sold, or offered for sale, for delivery
at the time and place of importation in the course of international
trade. The word 'ordinarily' in Section 14(1) is a word of
D significance. The ordinary meaning of the word 'ordinarily' in
Section 14(1) is 'non-exceptional' or 'usual'. It does not mean
'universally'. In the context of Section 14(1) for the purpose of
'valuation' of goods, however, by use of the word 'ordinarily',
the indication is that the ordinary value of the goods, is what it
E would have in the course of international trade at the time of
import. Section 14(1), thus,_provides that the value has to be
assessed on the basis of price attached to such or like goods
ordinarily sold or offered for sale, in the ordinary course of
events in international trade at the time and place of
F transportation.
13. Customs Valuation Rules have been framed by the
Central Government in exercise of the powers conferred by
Section 156 of the Act to maintain uniformity and certainty in
the matter of valuation of goods which are matters of procedure,
G substantive provision being contained in Section 14(1). Rule 3
and 4 of the Customs Valuation Rules provide for transaction
value method. Rejection of transaction value of goods by the
Customs Authority being totally an un-realistic value has been
found to be proper by this Court in the case of Collector of
H Customs, Bombay vs. Shibani Engineering Systems,
VARSHA PLASTICS PVT. LTD. & ANR. v. UNION OF 907
INDIA & ORS. [R.M. LODHA, J.]
Bombay (1996) 10 sec 42. A
14. In Eicher Tractors (supra) this Court held that the value,
according to Section 14, 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 in the course
8
of international trade. It was further held that by Rule 4(1)
mandate has been cast on the authorities to accept the price
actually paid or payable for the goods in respect of the goods
under assessment as the transaction value but this mandate is
subject to certain exceptions specified in Rule 4(2). It was also C
held by this Court in Eicher Tractors (supra) that both Section
14(1) of the Act and Rule 4 provide that the price paid by the
importer to the vendor in the ordinary course of commerce shall
be deemed to be the value in the absence of any of the special
circumstances indicated in Section 14(1) and particularized in
.- Rule 4(2). However, when the transaction value under Rule 4 D
is rejected, the value shall be determined proceeding
sequentially through Rule 5-8 of the Rules. In Eicher Tractors it
cannot be said to have been laid down that even in a case of
invoice manipulation or under-invoicing or ridiculously low price
or mis-declaration in respect of valuation of goods or E
description or non-commercial considerations or in such like
circumstances, the transaction value cannot be rejected by the
assessing authority. The observations in Eicher Tractors, "... In
the case before us it is not alleged that the appellant has mis-
declared the price actually paid. Nor was there a mis- F
description of goods imported as was the case in Padia Sales
Corporation'; leave no manner of doubt in what we have noticed
above. As a matter of fact in Eicher Tractors, Padia Sales
Corporation vs. Collector of Customs (1993) Supp. 4 SCC 57,
Basant Industries Nunhai, Agra vs. Additional Collector of G
- .. Customs, Bombay (1995) Supp 3 SCC 320 and Sharp
Business Machines vs. Collector of Customs (1991) 1 SCC
154; were found distinguishable as in these cases the rejection
of transaction value was found justified being covered by
special circumstances and/or mis-description of the imported H
908 SUPREME COURT REPORTS [2009] 1 S.C.R.
A goods to defraud revenue.
15 Rabindra Chandra Paul (supra) and South India
Television (P) Ltd.,(supra) also recognize the legal position that
transaction value can be rejected if invoice price is not found
B to be correct but it is for the Department to prove that the
invoice price is incorrect.
16. Rule 11 of Customs Valuation Rules also provide that
in case of dispute between importer and the officer of the
Customs valuing the goods it shall be resolved consistent with
C the provisions contained in sub-section 1 of Section 14 of the
Act.
17. It has to be kept in mind that once nature of goods has
been mis-declared, the value declared on the imported goods
o becomes unacceptable. It does not in any way affect the legal
position that the burden is on the Customs Authorities to .-
-
establish the case of mis-declaration of goods or valuation or
that the declared price did not reflect the true transaction value.
18. Section 151A of the Act confers upon the Board the
E power to issue orders, instructions and directions to the
authorities for proper administration of the provisions of the Act.
It also provides that all such authorities and all other persons
employed in the execution of the provisions of the Act shall
observe and follow such orders, instructions and directions of
F the Board. Proviso appended thereto states that no such
orders, instructions or directions shall be issued - (a) so as to
require all such officers of Customs to make a particular
assessment or to dispose of a particular case in a particular
manner or; (b) so as to interfere with the discretion of the
G Collector of Customs (Appeals) in exercise of his appellate
functions. The proviso to Section 151A makes it abundantly
clear that the Customs Officer who has to make a particular
assessment is not bound by such orders or instructions or
directions of the Board. An Assessing Authority under the Act
H being a quasi-judicial authority has to act independently in
VARSHA PLASTICS PVT. LTD. & ANR. v. UNION OF 909
INDIA & ORS. [R.M. LODHA, J.)
exercise of his quasi-judicial powers and functions. Section A
151A does not in any m;mner control or affect the independent
exercise of quasi-judicial functions by the Assessing Authority.
19. By the impugned Standing Order No.7493/99 dated
03.12.1999, the Chief Commissioner of Customs has given B
detailed guidelines and directions for the determination of
valuation of plastic items in the light of international prices
> contained in the foreign finance journals. The directions issued
to the assessing authorities is to apply what is described as
PLATI rate, which is explained as rates and prices maintained
in the internationally reputed finance journal PLATT's WEEKLY
c
• REPORT. It has also given direction as to how classification
of mixed material like floor sweeping should be made.
20. The question now is whether the impugned Standing
Order in any manner interferes with the independent quasi- D
judicial function to be discharged in the assessment of duty by
the Assessing Officer. Whatever be the language employed in
the Standing Order which may suggest that the said instructions
are in the nature of a mandate or command, High Court has
read down the impugned Standing Order purely as instructions E
or guidelines and not mandate or command for being obeyed
in each individual case of assessment before them. The High
Court further held that Standing Order is to be taken only as
an assistance in exercise of the quasi-judicial power of
~
determining value for the purpose of levying of customs duty. F
We agree with the view of the High Court. As a matter of fact,
it is the case of the Department as well that the impugned
Standing Order is not binding; it is just in the nature of guidelines
to streamline the functioning of Customs Officers at various
field formations. According to the Department, the impugned G
Standing Order was issued for the smooth functioning of
)( assessment and e~amination work and to bring about uniformity
in the work and it prescribes only pattern of assessment and
in no way, interferes with the discretion of the Assessment
Authority. In view of the categorical stand of the Department that
H
910 SUPREME COURT REPORTS [2009] 1 S.C.R.
A the impugned Standing Order is just in the nature of guidelines
and it does not in any way interfere with the discretion of
officers, the impugned Standing Order has to be read and
understood accordingly.
21. In so far as the reference to PLATT's Price Report or
8
other reputed financial journals which are indicators of
international prices for the value of imported goods for the
purpose of Section 14(1) is concerned, suffice it to observe that
once transaction value is rejected on valid grounds, the
Customs Authority has to proceed to determine the value of
C goods by following Customs Valuation Rules and on the basis
of contemporaneous import. However, in the absence of any
evidence with regard to contemporaneous import, reference to
foreign journals that may indicate the correct international price
for the purposes of Section 14 may not be irrelevant and relying
D upon such journal cannot be said to be altogether
unreasonable. As to whether in a given case such foreignjoumal
or for that matter PLATT's Price Report indicate correct
international price of the concerned goods for the purpose of
Section 14(1) would depend on facts of each case and that
E would be for the department to establish. The valuation of the
imported goods where the transaction value in the opinion of
Assessing Authority is liable to be rejected because of invoice
manipulation or under-invoicing or un-realistic price or mis-
declaration in respect of valuation of goods or description or
F where transaction value of the goods declared is ridiculously
low, which of course the Assessing Authority has to justify, he
must proceed to determine valuation of goods by following
Customs Valuation Rules. The availability of evidence of
contemporaneous import of the same goods obviously
G provides the best guide for determination of value of the import
of goods but in the absence of evidence of contemporaneous
import, reference to foreign journal for finding out correct
international price of imported goods may not be irrelevant
because ultimately the Assessing Authority has to determine
H value of the imported goods, at which such goods are sold or .
VARSHA PLASTICS PVT. LTD. & ANR. v. UNION OF 911
INDIA & ORS. [R.M. LODHA, J.)
offered for sale in the course of international trade at the time A
of importation.
22. Paragraph 7 of the impugned Standing Order which
provide as to how classification of mixed waste material like
floor sweeping should be made also has to be read only as 8
guidelines to the Assessing Authority. The Assessing Authority
in his quasi-judicial function has to take independent view in
this regard as well.
23. We do not intend to go into the facts as to whether the
Assessing Authority was justified in his findings in respect of C
imported goods having been mis-declared in terms of value
and some of the imported goods mis-declared in terms of
description, value and quality as these are the aspects which
have to be challenged by filing a statutory appeal. The High
Court has already kept these aspects open to be agitated by D
the appellants before the competent authority under the Act.
24. In the result, we find no merit in these appeals and
same are dismissed with no order as to costs.
K.K.T. Appeals dismissed. E
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