1986 (1) TMI 117 - HC - Customs

Summary

Issues:
Customs valuation rules applicability to imports, Reopening of case by Assistant Collector based on appellate decision, Misconception of appellate decision by Assistant Collector, Legality of notice issued by Assistant Collector.

Customs Valuation Rules Applicability to Imports:
The petitioner, a company engaged in manufacturing various items, including ball bearings and textile machinery components, imported machinery and raw materials. The Assistant Collector of Customs asserted that the value of imported goods should be determined under Rule 6 of the Customs Valuation Rules due to royalty payments made to collaborators. The Appellate Collector of Customs, however, allowed the appeal, stating that Rule 6 was not applicable to the petitioner's case. The Appellate Authority found that the petitioner did not import goods manufactured outside India under a trademark or patent design, and most imports were raw materials. The Assistant Collector's attempt to reassess under Rule 6 was deemed a misconception of the appellate decision.

Reopening of Case by Assistant Collector Based on Appellate Decision:
Following the appellate decision, the Assistant Collector issued a notice to the company to re-examine the case, requiring extra duty deposit and a bond for provisional assessment of imports from collaborators. The legality of this notice was challenged, arguing that the appellate order had already determined that Rule 6 was not applicable to the petitioner's imports. The court held that the notice was misconceived and required to be struck down.

Misconception of Appellate Decision by Assistant Collector:
The Assistant Collector's decision to reassess the value of imports under Rule 6 despite the appellate order stating otherwise was deemed a misunderstanding of the conclusions reached by the Appellate Authority. The court emphasized that the appellate order specifically found that Rule 6 was not attracted to the petitioner's imports, and the Assistant Collector's actions were based on a misconception of the decision.

Legality of Notice Issued by Assistant Collector:
The notice issued by the Assistant Collector, requiring re-examination and provisional assessment of imports, was challenged on the grounds that it contradicted the appellate decision that Rule 6 was not applicable. The court ruled in favor of the petitioner, stating that the notice was entirely misconceived and needed to be struck down. The petitioner's bonds furnished in response to the notice were discharged, and no costs were awarded in the case.