TMI Blog1993 (6) TMI 88X X X X Extracts X X X X X X X X Extracts X X X X ..... nd writ petition. The appellants also asked for release of the said consignment. By an order dated 27th February 1992 the Court of the first instance directed the appellants to reply to the said Show Cause Notice within the time specified. The Court also directed release of the goods on certain terms and conditions. The matter was then taken up on appeal. The Appeal Court by the orders dated 20th March and 3rd April, 1992 passed certain directions regarding disposal of the matter by the adjudicating authority in pursuance of the Show Cause Notice issued by them. Thereafter on 24th April, 1992 an order of adjudication was made by the adjudicating authority. The appellants preferred an appeal before the Customs, Excise Gold (Control) Appellate Tribunal against the said order of adjudication. The appeal was admitted by the Tribunal waiving the condition of pre-deposit of penalty imposed by the adjudicating authority by furnishing ITC Bonds. However, the Tribunal did not pass any order as regards release of the consignment. The said appeal is still pending. 3. Thereafter, an application was made by the appellants for modification of the said order dated 20th March, 1992 passed by a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ers) be suitably modified and/or varied directing the respondent/authorities to release the entire consignment consisting of used diesel engines imported by the petitioners on the basis of payment of admitted duty, on the basis of invoice value and securing the difference of duty as alleged by the customs authorities in their order in original by way of Bank Guarantee and P.D. Bond and/or any other terms this Court may deem fit and proper; (b) The respondents be directed to refund the licence to the petitioners after debiting the same of the c.i.f. value and/or invoice of the subject consignment forthwith." On 7th September, 1992 the following order was passed by this Bench : "This application has been made for modification of the order dated 26th August, 1992. After hearing the learned Advocates appearing for the parties, following modification is made :- The appellant will be at liberty to take delivery of 200 sets of diesel engines upon payment of the admitted duty on c.i.f. value and upon payment of the 50% of the difference in duty in cash and furnishing a bank guarantee to the extent of balance 50%. In other words, the bank guarantee shall be furnished to the extent o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Act, the learned counsel has submitted that the actual price paid is not relevant for the purpose of determining the assessable value as the assessable value shall be deemed to be the price at which such goods or like goods are ordinarily sold at the time and place of importation and exportation in the course of international trade. Mr. Sen has relied on several decisions in support of his contentions to which we shall refer later. 10. It is also the contention of Mr. Sen for the appellants that determination of assessable value under Section 14(1) of the Act in the adjudication order is now the subject matter of an appeal before the Tribunal. Once an appeal is preferred, the decision loses its character of finality and what was once res judicata, again becomes res sub judice. In view of the above, it is contended that the appellant's licence cannot be debited by the enhanced assessable value as determined in the adjudication order which has lost its finality. 11. In short the submission of Mr. Sen is that determination of assessable value u/s 14 has nothing to do with the determination of actual CIF value of the goods which is only relevant for the purpose of debiting licen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .i.f. 14. There the Division Bench relied on a decision of the Bombay High Court in the case of Union of India and Others v. Glaxo Laboratories (India) Ltd., reported in 1984 (17) E.L.T. 284. In that case the Bombay High Court held that whatever figure the customs want to debit, they must necessarily debit as c.i.f. value and never value as defined in Clause 2(e) of the Import (Control) Order. The c.i.f. value for the purpose of licence as per the first clause of that instruction is inclusive of the commission allowed by the supplier. After deducting commission, the balance price is alone relevant for calculating the foreign exchange. Therefore, there is one kind of valuation for the purpose of assessment to customs duty but another for the purpose of c.i.f. value which is to be debited to the licence. This value to be debited consists of the items viz. the price of the goods and the commission allowed and where the commission is not apparent on the surface, it is the duty of the Customs authorities to find out and add to it the said price so that the price of the goods plus the commission and the freight and insurance would constitute the c.i.f. price for the purpose of debiting ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion is found determined by the proper officer at $ 200 per M.T, then for the purpose of assessable value under Section 14, the value would be treated as US $ 200 per M.T. However, the valuation for the purpose of Customs duty, i.e. assessable value, has nothing to do with the actual c.i.f. value of the goods which, in the example given above, is only $ 100 per M.T. In other words under Section 14(1) of the Act, the value for the purposes of assessment of duty would be the deemed value. Even if the invoice price is proved to be true price as agreed between the parties, for it is the international market price which is the real value for the purpose of Customs duty. Thus the deemed value in terms of Section 14 is the price at which such goods are ordinarily sold or offered for sale at the place of importation. 18. It is true, in the instant case, for the purpose of payment of Customs duty the assessable value has been enhanced by the adjudicating order, but for the purpose of debiting the licence the declared c.i.f. value has to be taken to be the basis in the absence of any finding that the importer has paid something over and above the declared c.i.f. value. The international pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ods for the purpose of debiting the licence. It is not the case of the Customs authorities that the c.i.f. value as reflected and declared in the agreement or invoice does not represent the correct c.i.f. value and the importer has clandestinely paid to the foreign supplier more than what has been shown in the agreement. 23. Mr. Roychowdhury has sought to distinguish the judgment of the Division Bench of this Court in Sneha Traders (supra). Our attention has been drawn to the observation made in paragraph 38 of the said judgment where the Division Bench observed as follows :- "Thus in any event, there was or could be no scope to allege any violation of provision under Section 111(d) of the Customs Act in the instant case." 24. Mr. Roychowdhury's contention is that in the case of Sneha Traders (supra) there is no allegation of violation of Section 111(d), which, however, is not the case here. Here there is a specific charge of violation of Section 111(d). In our view, it is immaterial whether the allegation regarding violation of Section 111(d) of the Customs Act is made or not against an importer. Even if there is an allegation of violation of Section 111(d) several consequen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... awn to the discrepancy mentioned by the Customs authorities in the show cause notice as to whether the licence permitted import of engines with gear boxes, compressors, clutches, alternators and other accessories, but the licensing authority (who is also a party to the writ petition) never came forward with the required clarifications to contradict the stand of the appellants, nor have they taken any steps against the appellants for suspension or cancellation of the said licence on the ground that it has been forged. This fact supports the contention of the appellants that the case of the forging of the licence has not been established by the Customs authorities. 27. Even the stand of the Customs authorities in this regard shows that they did not treat the licence as forged. The Customs authorities have allowed the subject goods to be cleared against the very same licence which they have labelled as forged. They have also purported to debit the very same licence with the assessable value as determined by the adjudicating authority. The adjudicating authority has passed an order for release of the goods upon payment of redemption fine in lieu of confiscation against the very same ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s to decide as to the validity of the licence and not the Customs authorities. The Customs authorities are bound to proceed on the basis of the licence unless the licence is cancelled or suspended. 31. Mr. Roychowdhury has, however, relied on the Customs Appraising Manual, Vol. II, which speaks of debiting of licence in case of adjudication. Our attention has been drawn to para 12 at Page 142 of the said Manual, which reads as under :- "It has been provided under the Imports (Control) Order, 1955 that in the cases where the goods imported do not conform to the description given in the licence, the licence may be treated as having been utilised for importing the said goods. This implies that in the case of an importation held as unauthorised, the licence against which the goods have been imported should be debited with the value of the goods. The licence should also be suitably endorsed with the facts of adjudication." 32. The aforesaid paragraph would clearly demonstrate that all that is required to be done is that in the licence a suitable endorsement has to be made regarding the assessable value determined in adjudication. The Customs Appraising Manual cannot say that the a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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