TMI Blog1975 (7) TMI 75X X X X Extracts X X X X X X X X Extracts X X X X ..... and the scientific instruments which are manufactured by the principals of the petitioner abroad and which are imported into India by the petitioner as the sole distributor or agent of the foreign principals in India are liable to Customs Duty. The petitioner has been carrying on its business for a number of years. In 1964 in the matter of assessment of duty payable by the petitioner on the goods imported, a dispute arose and the Asstt. Collector of Customs, the respondent No. 1 herein sought to disallow trade discount altogether and he changed the basis of determination of assessable value of the goods from Section 14(1)(b) to Section 14(1)(a) of the Customs Act, 1962 (hereinafter referred to as the `Act'). Against the said order of the Asstt. Collector of Customs, the petitioner preferred an appeal and in the appeal; the contention of the petitioner was accepted by the Appellate Collector who by his order dated 8-12-1965 allowed the appeal and directed that in the matter of determination of assessable value for computing the duty payable by the petitioner Section 14(1)(b) of the Act should be applied. On the basis of the order of the Appellate Authority, determination of the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o their representation during the hearing before my predecessor that loading in the valuation has been done arbitrarily as the Valuation Rules provide a certain percentage of the discount which is set off against post importation charges. In no circumstances can the post importation charges be loaded in the value. Even if there is one or two volitary importations of the products, they hold sole agency in India and they get their discounts from their principals. The appellants, therefore, requested that this may be examined when the Valuation Rules provide for consideration for setting off the post importation charges a certain percentage of the discount should be allowed to them. Beside above and what had been stated in the written appeal Shri Roy said that he had two more points to put up for my attention. First, he referred to Section 14(1)(a) of the Customs Act and stated for the purpose of valuation, it is not only the place of importation but also the time of importation which is relevant and, therefore, any services rendered for which certain post importation charges are incurred the value of such services should not be loaded on; and secondly he referred me to the Custo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) Shri J.N. Roy, Advocate, 32/1, Broad Street, Calcutta-19. Sd/- Illegible 22-4-1972 for Appellate Collector of Customs, Calcutta. On the basis of the order passed by the Appellate Collector of Customs, annulling the order of the Asstt. Collector of Customs and remanding the matter to the Assistant Collector of Customs has passed an order holding that determination of the assessable value should be on the basis of Section 14(1)(a) of the Act and not on the basis of Section 14(1)(b) and necessarily the petitioner was not entitled to any deduction. The final order was passed by the Assistant Collector of Customs on 5th March, 1973 and before passing the final order the Asstt. Collector of Customs by his order dated the 3rd June, 1972 had directed and ordered that pending finalisation assessment would be made provisionally under section 18(1) of the Act read with Customs Provisional Assessment Regulations, 1963. It also appears that before passing the final order on the 5th March, 1973 the Asstt. Collector of Customs sent a letter to the petitioner asking to show cause as to why on the basis of the statements contained in the said letter he should ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ner in this petition is with regard to the final order of the Assistant Collector of Customs dated the 5th March, 1973. 5. Mr. Biswarup Gupta, learned Counsel appearing in support of this application has raised before me the following three contentions: (1) The proposed order dated 2-12-1972 and the final order dated 5-3-1973 must be considered to be bad as the said orders have been passed by the Asstt. Collector of Customs in excess of his jurisdiction and in violation of the order of the Appellate Collector passed in appeal. (2) The said two orders are also otherwise bad as Section 14(1)(a) which has been sought to be applied by the Assistant Collector of Customs in the making the said two orders does not have any application to the facts and circumstances of this case and Section 14(1)(b) has to be applied. (3) The finding of the Tribunal in the final order that there has been a suppression of facts by the petitioner is perverse, unwarranted and was without any jurisdiction and the further order on the basis of suppression of facts directing the said letter to be treated as demand made in respect of all under-assessed consignments is necessarily bad and illegal. 6. In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ith the order of the Appellate Authority Mr. Gupta contends that the Asstt. Commissioner has not only acted illegally and improperly but has acted in excess of his jurisdiction. Mr. Gupta contends the impugned orders must, therefore, be considered to be illegal and without jurisdiction and they are in any event erroneous and the error is apparent on the face of the record. 7. Mr. Gupta has next argued that Section 14(1)(a) can have no application to the facts and circumstances of the case and Section 14(1)(b) has to be applied and the same has been applied all through. In this connection Mr. Gupta has referred to Section 14 of the Customs Act, 1962. Section 14 may be set out: "14. Valuation of goods for purposes of assessment. — (1) For the purposes of the Indian Tariff Act, 1934 (32 of 1934) 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- (a) the price at which such or like goods are ordinarily sold, 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, wher ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es concerned at the time of the assessments. He has commented that the said finding has been deliberately arrived at to circuvent the provisions relating to limitation of the poriod of six months and to come within the period of limitation of five years in terms of the provisions contained in Section 28(1) of the Customs Act. Mr. Gupta contends that in any event the Assistant Collector of Customs in the proceeding on remand had no authority or jurisdiction to go into the question as his jurisdiction was limited to the order earlier passed by him and subsequently set aside on appeal and remanded back to him to be decided on the basis of the decision of the Appellate Authority. Mr. Gupta submits that in that view of the matter and in any view of the matter, the Asstt. Collector of Customs had no jurisdiction or authority to direct that the said letter should be treated as a demand notice in respect of the under-assessed consignments. It is the submission of Mr. Gupta that there is no question of any suppression of fact, and there is no question of any under assessment of the earlier consignments and necessarily there can be no question of any demand in terms of the provisions contain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the value for the purpose of assessment involves an enquiry into the various questions of fact and those.questions are indeed all disputed questions and in this jurisdiction the Court should not really enter into the merits of controversy of such valuation. Mr. Basu has next argued that in view of the finding of the Asstt. Collector of Customs, he was perfectly justified in holding that in the case of earlier consignments there has been an under-assessment. Mr. Basu has finally contended that as the Act provides for an appeal against the order of the Asstt. Collector of Customs and as on earlier occasions the petitioner had in fact preferred appeals against the order of the Asstt. Collector of Customs, there is no justification on the part of the petitioner is not following the normal remedy of perferring an appeal against the order of the Assistant Collector to the Appellate Authority in terms of the provisions of the Act and in invoking the jurisdiction of this Court under Article 226 of the Constitution. Mr. Basu has further argued that the petitioner by his own wilful act has deprived himself of the right to prefer an appeal to the appellate authority in terms of the provision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tor of Customs had erred in applying the provisions of Sec. 14(1)(a) in determining the value. The further direction of the Appellate Authority while remanding the matter back to the Assistant Collector after annulling the order to re-examine on merits and to determine as to what quantum of discount claimed can be allowed on account of after-sales service or expenditure by the local sole agents, clearly indicates to my mind, that the Appellate Authority directed the Assistant Collector of Customs to consider the assessment on merits by applying the provisions of Section 14(1)(b) of the Act and by giving necessary allowance to the petitioner in respect of the petitioner's claims for discount for after-sales service or expenditure. I am unable to accept the contention of Mr. Basu that as a result of the order of the Appellate Authority the entire matter before the Asstt. Collector of Customs was at large and he was free to decide the case in his own way and also to decide that Section 14(1)(a) was applicable and not Section 14(1)(b). When the matter came back to the Assistant Collector of Customs on remand by the Appellate Authority, his jurisdiction and power were undoubtedly limite ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his Court without filing any appeal against the said order. 11. In view of my finding on the first question it does not indeed become necessary to decide the other contentions by Mr. Gupta. I am, however, inclined to the view that there appears to be considerable force in the contention of Mr. Gupta that in the facts and circumstances of this case Section 14(1)(b) is indeed applicable in determining the value. I however, do not consider it necessary to decide this question finally. I also wish to observe that the finding of the Asstt. Collector of Customs that there has been suppression of facts by the petitioner in respect of the earlier consignments is clearly unwarranted and unjustified. As the entire order is being set aside and quashed it does not become necessary for me to deal with this aspect at any length. 12. In the result the petition succeeds. The rule is made absolute, in so far as the orders dated 2-12-1972 and 5-3-1973 are concerned. The said orders are hereby quashed. So far as the order dated 3-6-1972 is concerned making provisional assessment under Section 18(1) read with Customs Provisional Assessment Regulation, 1963, I do not think it will be proper to inte ..... X X X X Extracts X X X X X X X X Extracts X X X X
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