Commissioner of Customs, Vs. M/S. Auto International, Bombay - Court Judgment

Excerpt:
1. this appeal arises out of is directed against the order-in-original dated 21.1.94 passed by the commissioner of customs, bangalore.2. the issue relates to valuation. by impugned order the collector of customs, bangalore has accepted the declared invoice price of us $ 0.41 per piece as the true transaction value. he ordered release of the 29,278 pieces of lucas cav filters model 7111-296 under seizure totally valued at rs 26,33,777/- to m/s auto international, bombay. further, he ordered confiscation of 120 pieces of lucas pintles valued at rs 4,200/- under the provisions of customs act. however, he gave option to redeem the goods on payment of redemption fine of rs 2000/-. he dropped the further proceedings against m/s auto international, bombay and m/s k. venugopal & co. and others. department has come in appeal on the issue of valuation.3. the department has come in appeal mainly on the ground that the commissioner erred in not taking into the account of manufacturer's invoice no cs 86847 dated 10.4.92 against which the identical goods were imported at madras by bill of entry no 516 dated 1.6.92. the said invoices were issued by m/s lucas export services ltd., england under unit price as shown as us $ 0.68 per piece.4. while reiterating the grounds the departmental representative submitted that the commissioner erred in holding that the said invoice issued by manufacturer in favour of m/s lucas, tvs, madras was between two related parties and therefore, unacceptable as true transaction value.5. arguing for the appellants, sh. b.v. kumar, advocate submitted that the appeal is not maintainable because of the reason that the importer in this case is m/s k. venugopal & co. and not m/s auto international.since the department has not made m/s k. venugopal & co. as respondent in the instance case, the appeal itself is not maintainable. he submitted that the appellants are dealers of auto parts and they purchased auto parts from m/s k. venugopal & co., bangalore. m/s k.venugopal & co. cleared 40,800 pieces of filter elements vide bill of entry no 807 dated 30.12.91 at icd, bangalore. he further contended that the department questioning the valuation determined by the commissioner without making m/s k. venugopal & co. and notwithstanding that the ground urged by the department on point of valuation is also not sustainable. in support of this contention, he referred to the decision of supreme court in the case of m/s eicher tractors ltd. vs commissioner of customs, bombay reported in 2000 (41) rlt 621 (sc) wherein it was observed that the value according to section 14(1) shall be deemed to be the price at which such or like goods are ordinarily sold or offered for sale, for delivery of the time and place of importation - in the course of international trade. the word 'ordinarily' in section 14 (1) of customs act 1962 implies the exclusion of extra ordinary or special circumstances as indicated in the section held particularized in rule 4 (2) of customs valuation (determination of price of imported goods) rules 1988.6. we have carefully considered the submissions made by both sides with reference to the facts and case law. there is substantial force in the arguments advanced on behalf of the assessee that the department cannot question the valuation aspect determined by the commissioner with out making importer as respondent. as can be seen from the records, it is clear that m/s k. venugopal & co. is the importer and not the appellant m/s auto international. on point of valuation also, no evidence has been placed on record to substantiate the claim of the department that the transaction value is not correct price. in view of this position, the ruling laid down by the supreme court in the case of m/s eicher tractors ltd. (supra) is also clearly applicable to the facts of this case as it was rightly pointed on behalf of the respondent.7. in the facts and circumstances, we do not find any substance in the appeal filed by the department. thus this appeal is dismissed in the above terms.

Judgment:
1. This appeal arises out of is directed against the Order-in-Original dated 21.1.94 passed by the Commissioner of Customs, Bangalore.

2. The issue relates to valuation. By impugned order the Collector of Customs, Bangalore has accepted the declared invoice price of US $ 0.41 per piece as the true transaction value. He ordered release of the 29,278 pieces of Lucas CAV filters Model 7111-296 under seizure totally valued at Rs 26,33,777/- to M/s Auto International, Bombay. Further, he ordered confiscation of 120 pieces of Lucas pintles valued at Rs 4,200/- under the Provisions of Customs Act. However, he gave option to redeem the goods on payment of redemption fine of Rs 2000/-. He dropped the further proceedings against M/s Auto International, Bombay and M/s K. Venugopal & Co. and others. Department has come in appeal on the issue of valuation.

3. The Department has come in appeal mainly on the ground that the Commissioner erred in not taking into the account of manufacturer's invoice No CS 86847 dated 10.4.92 against which the identical goods were imported at Madras by Bill of Entry No 516 dated 1.6.92. The said invoices were issued by M/s Lucas Export Services Ltd., England under unit price as shown as US $ 0.68 per piece.

4. While reiterating the grounds the Departmental representative submitted that the Commissioner erred in holding that the said invoice issued by Manufacturer in favour of M/s Lucas, TVS, Madras was between two related parties and therefore, unacceptable as true transaction value.

5. Arguing for the appellants, Sh. B.V. Kumar, Advocate submitted that the appeal is not maintainable because of the reason that the importer in this case is M/s K. Venugopal & Co. and not M/s Auto International.

Since the Department has not made M/s K. Venugopal & Co. as Respondent in the instance case, the appeal itself is not maintainable. He submitted that the appellants are dealers of Auto parts and they purchased auto parts from M/s K. Venugopal & Co., Bangalore. M/s K.Venugopal & Co. cleared 40,800 pieces of filter elements vide Bill of Entry No 807 dated 30.12.91 at ICD, Bangalore. He further contended that the department questioning the valuation determined by the Commissioner without making M/s K. Venugopal & Co. and notwithstanding that the ground urged by the department on point of valuation is also not sustainable. In support of this contention, he referred to the decision of Supreme Court in the case of M/s Eicher Tractors Ltd. Vs Commissioner of Customs, Bombay reported in 2000 (41) RLT 621 (SC) wherein it was observed that the value according to section 14(1) shall be deemed to be the price at which such or like goods are ordinarily sold or offered for sale, for delivery of the time and place of importation - in the course of international trade. The word 'ordinarily' in section 14 (1) of Customs Act 1962 implies the exclusion of extra ordinary or special circumstances as indicated in the section held particularized in Rule 4 (2) of Customs valuation (determination of price of imported goods) Rules 1988.

6. We have carefully considered the submissions made by both sides with reference to the facts and case law. There is substantial force in the arguments advanced on behalf of the assessee that the department cannot question the valuation aspect determined by the Commissioner with out making importer as Respondent. As can be seen from the records, it is clear that M/s K. Venugopal & Co. is the importer and not the appellant M/s Auto International. On point of valuation also, no evidence has been placed on record to substantiate the claim of the department that the transaction value is not correct price. In view of this position, the ruling laid down by the Supreme Court in the case of M/s Eicher Tractors Ltd. (Supra) is also clearly applicable to the facts of this case as it was rightly pointed on behalf of the respondent.

7. In the facts and circumstances, we do not find any substance in the appeal filed by the department. Thus this appeal is dismissed in the above terms.