TMI Blog1975 (11) TMI 49X X X X Extracts X X X X X X X X Extracts X X X X ..... the said notification from so much of the duty leviable thereon as was in excess of the duty leviable at the rate specified in Column 3 of the said table. The rate for jute specialities prescribed in Column 3 of the table was nil, and the articles specified in Column 2 included the relevant jute specialities exported by the petitioner whose f.a.s. value was not less than Rs. 3,500 per tonne. 4. The petitioner's jute specialities were, therefore, exempted from payment of Customs duty so long as their value was not less than Rs. 3,500 per tonne. If the value was less, the exemption under the notification did not apply, and duty was payable on those goods under Item 2 of the Second Schedule to the Tariff Act. By virtue of notifications issued under Section 12(1) of the Foreign Exchange Regulation Act, 1947, exporters had to declare at the time of shipment the 'full export value' of the goods. It appears that in order to avoid controversies, as far as possible as to the real export value of the goods, the Central Government under a resolution published in a notification dated December 4, 1962, provided for voluntary registration of export contracts for sale of jute goods with a commi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from the sale price stated in the contract. For example, f.a.s. value was determined by deducting from c.i.f. price the insurance premium, freight and the port charges. Where the price quoted was on f.o.b. basis the f.a.s. value was determined by deducting the port charges. It is contended that the Customs authorities have at all material times until about November 1968 accepted f.a.s. values calculated on that basis for assessment of export duty and thereby represented to the trade that the said basis was the correct basis for determination of f.a.s. values. In support of that contention the petitioner relied on a letter dated November 29, 1968, from the Additional Collector of Customs, Calcutta, to the Secretary, Calcutta Jute Fabrics Association. 9. The petitioners claim that calculated on the said basis the f.a.s. value of the petitioners goods with which we are concerned in this case was not less than Rs. 3,500 per tonne and, therefore, those goods qualified for exemption from payment of export duty under the aforesaid notification dated June 19, 1968. 10. Relying on the aforesaid representations the petitioners entered into export contracts with their foreign buyers and r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rate of Rs. 500 per tonne and confirmed the demand for Rs. 14,500. The petitioners paid the said amount under protest by authorising the Customs authorities to debit the petitioners' deposit account with the said amount. 13. The petitioners also received four further notices under Section 28(1) in respect of four other shipments under the said contract and six notices in respect of shipments made under other contracts. The petitioners complain that none of the notices under Section 28 disclose any grounds in support of the allegation that any duty had been short levied and the said notices are accordingly without jurisdiction, illegal and void and of no effect. Moreover, the Customs authorities in claiming that the duty has been short levied, have calculated the f.a.s. value not in the accepted and established manner described hereinbefore of making deductions from the sale price but on the principle of adding premia to the basic price, which is wrong. Moreover, in any event, by reason of the representation made by the notification dated December 4, 1962, and the letter dated November 29, 1968, referred to hereinbefore, the respondents are estopped from claiming that the f.a.s. v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rence to the sale contracts of the petitioners, he maintained, would show that excepting in the disputed cases the sale prices were never above the market price by about 15 per cent. The f.a.s. prices of the goods covered by the disputed contract are inclusive of export duty, otherwise the said f.a.s. prices could not be so high. In other words, the Assistant Collector's case was that the petitioners included export duty in quoting their prices although they were claming that the goods were not liable to pay any duty. In their application for registration of contracts in the disputed cases, the petitioners did not deduct the duty amount to arrive at the f.a.s. prices and the f.a.s. prices declared by them were inflated prices. As regards the letter from the Additional Collector of Customs, it was stated there that the f.a.s. prices would be deducted by appropriate deductions, depending upon the nature of the said contracts. For example, if the goods are sold on c.l.f. basis taking duty into consideration, the method of arriving at the f.a.s. prices is to deduct freight, insurance, duty and port charges. The f.a.s. prices thus obtained will be equal to the market price of those good ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rities. The statutory duty of the Customs authorities to assess and levy customs duty is not in any way abrogated or curtailed. If the Customs authorities have reason to believe that the contract price does not represent the true f.a.s. value they would be entitled to go behind the certificate and require the exporter to satisfy them as to the proper f.a.s. value in order to determine whether the goods are entitled to exemption from export duty under the relevant notification. 24. With regard to the contention that the mode of valuation prescribed in the letter from the Additional Collector of Customs dated November 29, 1968, the learned Judge appears to have taken the view that the statutory requirement of Section 14 has to be complied with and, therefore, any other method of calculating the f.a.s value, even if sanctioned by usage, will not make the mode of valuation prescribed in Section 14 untenable. He has, however held that the respondents have acted precipitately in confirming the demand without taking into consideration the evidence furnished by the petitioners. No reasons have been given in the order under Section 28(2) for holding that the goods have been correctly held ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inarily sold or offered for sale for delivery at the time and place of exportation 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 sale or offer for sale. On a consideration of the principle of valuation enjoined by Section 14 it is clear that the price at which a particular seller enters into a contract with a particular buyer does not necessarily reflect the price at which such goods are sold at the time and place of exportation in the course of international trade. Though it is unlikely that the exporter will be able to sell the goods at a much higher price than the ruling market price for sale of similar goods on similar terms, there is nothing to prevent the seller from striking a better bargain. Be that as it may, what has to be taken as the basis of valuation is the price at which such or like goods are ordinarily sold at the time and place of exportation and not the contract price of the seller in question. In valuing the goods the Customs authorities have taken the basis of standard goods and added to it, the premium value determined by the Indian Jute Mills Assoc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lating the f.a.s. value of their goods. By the said notification dated December 4, 1962, the Central Government did not hold out that the certificates of registration would be conclusive proof of the f.a.s. value declared by the exporter in the application for registration. The notification merely stated that the production of the registration certificate before the Customs authorities at the time of shipment as part of the shipping documents will ordinarily be accepted by the Customs authorities as constituting sufficient proof of the scope of the contract price and related financial items. The Revenue is, therefore, not bound by the certificate. If they have reasons to scrutinise the values of the goods afresh they are free to do so. In any event, the notification cannot override the statutory mandate of Section 2(41) and Section 14 of the Customs Act. To hold to the contrary will be to apply an estoppel against the statute. In his letter, the Additional Collector of Customs stated that the practice has been to go by the sale price as indicated in the sale contracts, and wherever necessary, the f.a.s. price is deducted by means of suitable deductions depending upon the nature of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he sole judge of the quantum of import licence to be granted to an exporter, and that the Courts were powerless to grant relief if the promised import licence were denied to the exporter who had acted to his prejudice relying upon the representation. Hence a person aggrieved because of the failure to carry out the term of the scheme was entitled to resort to the Court and claim an order that the obligations imposed upon the Textile Commissioner by the scheme be carried out. 31. In the case of Century Spinning and Manufacturing Co. v. Ulhasnagar Municipality (2) the appellant had set up its factory in 1956 in an industrial area where no octroi duty was payable in respect of the goods imported by the company into the industrial area for use in the manufacture of its products. In 1959, a municipality was constituted for certain villages including the industrial area in question. On representation having been made by the appellant and other manufacturers for excluding the industrial area from the municipal district area, the Government of Maharashtra made a proclamation on April 27, 1962, that the industrial area be excluded from the municipal jurisdiction. The District Municipality ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the Supreme Court. In accepting the appeal the Supreme Court held that a representation that something will be done in future may involve an existing intention to act in future in the manner represented. If they presentation is acted upon by another person it may, unless the statute governing the person making the representation provides otherwise, result in an agreement enforceable at law. If the statute requires that the agreement shall be in a certain form no contract may result from the representation and acting thereupon. But the law is not powerless to raise in appropriate case an equity against him to compel the performance of the obligation arising out of the representation. 36. In neither the Anglo-Afghan case (supra) nor in the Century Spinning and Manufacturing Co's case (supra) representations were made which can counter to or were not consistent with the mandatory provisions of a statute. In para 10 of the report in the Century Spinning and Manufacturing Co.'s case the Court pointed out that if the representation is acted upon by another person it may unless the statute governing the person making the representation provides otherwise, result in an agreement enfor ..... X X X X Extracts X X X X X X X X Extracts X X X X
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