TMI Blog2002 (10) TMI 103X X X X Extracts X X X X X X X X Extracts X X X X ..... 15-4-1993. The chargeable weight of the consignment was 315 kgs and the actual loading, unloading and handling charges amounted to Rs. 65.40ps as per the tariff of the International Airport Authority of India, Madras. However, the first respondent on the basis of the impugned notification added a sum of Rs. 15,214.69ps to the value of the goods as handling charges. The differential duty as a result of considering the notional handling charges instead of actual handling charges amounted to Rs. 16,209.20ps instead of Rs. 69.98ps. The petitioner is aggrieved by the addition of handling charges at the notional rate pursuant to proviso (ii) to Rule 9(2) of Customs Valuation (Determination of Price of Imported Goods) Rules, 1988, as amended by Notification No. 39 of 1990, dated 5-7-1990, whereby the charges for loading, unloading and handling associated with the delivery of the imported goods at the place of importation had been fixed to be one percent of the free on board value of the goods plus the cost of transport of the imported goods to the place of importation plus cost of insurance. The attack on the amended proviso (ii) to sub-rule (2) of Rule 9 of Customs Valuation (Determinati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing little or no expense by way of handling, whereas heavy weight items like machinery, hardware might involve substantial expenditure for loading, unloading and handling. 6.It is submitted that the handling services are rendered by the sea port and air port authorities. The handling charges are levied on the basis of either the gross weight or chargeable weight, which ever is higher. Both these weights are incidentally available in the air bill accompanying the consignment. The International Air Port Authorities and the Port Trust are having schedule of tariff and the petitioners have from time to time been paying the handling charges to the authorities as per the tariff. In order to substantiate the same, the petitioner made available the particulars in respect of certain bills of entry by which importation was made by the petitioner since 5-7-1990 for payment of actuals towards handling charges. 7.The learned Additional Solicitor General appearing for the respondents submitted that prior to Customs Valuation (Determination of Price of Imported Goods) Rules, 1988, the importers were required to include in the assessable value of the goods 3/4th percent of the CIF value of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... b) are not ascertainable, such charges shall be one percent of the free on board value of the goods; (iii) Where the cost mentioned at clause (c) are not ascertainable, such cost shall be 1.125% of free on board value of the goods." By means of the amendment, in sub-clause (ii), the words "where the loading and unloading charges are not ascertainable", have been removed and the remaining portion of fixing the rate of one percent of the FOB value has been retained as it was. It is to be noted that prior to the rules, the addition for the purpose of assessable value of the imported goods were made under the GATT Agreement on the objective and quantifiable data at 3/4% of CIF value of the goods. The figure of the percentage which has been fixed in the rule is on the basis of experience gained all these years and also the difficulty experienced by them in ascertaining the real actuals incurred in respect of loading, unloading and handling charges and to have certainty. 10.It is submitted by the learned Senior Counsel Mr. C. Natarajan that he is not challenging the inclusion of loading, unloading and handling charges in the value of the goods for the purpose of assessing th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 156(2)(a) of the Customs Act. In that case, the appellants were contractors engaged on tunneling operations in the Snowy Mountains region of New South Wales. The respondent was employed by the appellants as an Assistant Surveyor. The procedure for excavation followed a regular cycle. When the respondent was engaged in the operation of excavation, a rock fell down from the roof of the blasted out area striking him and causing serious injuries. Under Section 22(1) of the Scaffolding and Lifts Act, 1912-1960, the Governor had power to make regulations, not inconsistent with the Act, prescribing all matters which were authorised to be prescribed or necessary or convenient to be prescribed for giving effect to the Act; and by sub-section (2)(g), he had power to make regulations relating to "(iv) the manner of carrying out excavation work" and "(v) safeguards and measures to be taken for securing the safety and health of persons engaged in .... excavation work". Regulation 98, so far as relevant, provided that "every drive and tunnel shall be securely protected and made safe for persons employed therein; ....". In an action for damages for personal injuries the respondent alleged brea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h (Agricultural Produce and Livestock) Markets Rules, 1969 and Bye-law 24(5) framed under Section 34(1), the Supreme Court has held that : "... it will be seen that the market fee can be levied under the Act only on the sales and purchase of notified agricultural produce within the notified area. Explanation I to Section 12 creates a legal fiction and provides that if any notified agricultural produce is taken out of a notified market area, it shall be presumed to have been purchased or sold within such area. The presumption is a rebuttable presumption and can be shown to be not correct. The policy in enacting this provision is only to cover such transactions of sale and purchase for which direct evidence may not be available. Since a notified agricultural produce can be sold only within the notified market area, and, that too, by a trader having a licence issued to him by the committee, it is obvious that if such commodity is moved out of the notified area, it would mean either that it has been sold or purchased. Otherwise, there would be no occasion to move such commodity out of the notified market area. The legal fiction was thus limited to the "moving" of the commodity from w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... some authority to whom it is submitted under a valid law for disposal. The said authority, in our view, is not relevant to the facts of the present case. 16.The learned counsel also relied on a decision of the Supreme Court in Venkateshwara Theatre v. State of A.P. reported in (1995) 96 STC 130 to contend that the classification is not founded on intelligible differentia, which distinguishes, those that are grouped together from others and the differentia did not have rational relation to the objects sought to be achieved. But in the facts of the present case, there is no classification among the importers, but what is contended is that the fixation of uniform percentage for all the goods is treating unequals as equals. 17.We are not able to uphold the contention of the learned counsel for the petitioner for the reason that prior to the impugned notification, the same one percent of FOB value was taken by the authorities as loading, unloading and handling charges for determination of the assessable value of the goods, when the actuals are not assessable. Even prior to that, 3/4th of the FOB value has been added to the value of the goods as loading, unloading and handling char ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t power itself must be widely construed; and must include the power to impose a tax and select the articles or commodities for the exercise of such power; it must likewise include the power to fix the rate and prescribe the machinery for the recovery of the tax. This power also gives jurisdiction to the legislature to make such provision as, in its opinion, would be necessary to prevent the evasion of the tax. In imposing taxes, the legislature can also appoint authorities for collecting taxes and may prescribe the procedure for determining the amount of taxes payable by any individual; all these provisions are subsidiary to the main power to levy tax." The Apex Court in the case of Avinder Singh and Others v. State of Punjab and Others reported in (1979) 1 SCC 137 has observed as follows : "The Founding Document of the nation has created the three great instrumentalities and entrusted them with certain basic powers - legislative, judicative and executive. Abdication of these powers by the concerned instrumentalities, it is axiomatic, amounts to betrayal of the Constitution itself and it is intolerable in law. This means that the legislature cannot self-efface its personality a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Customs Authority, which value can be more and at times even less than what is indicated in the document of purchase or sale. The majority judgment of the Constitution Bench of the Supreme Court in the case of R.K. Garg v. Union of India reported in AIR 1981 SUPREME COURT 2138 has observed as follows : "Another rule of equal importance is that laws relating to economic activities should be viewed with greater latitude than laws touching civil rights such as freedom of speech, religion etc. It has been said by no less a person than Holmes, J., that the legislature should be allowed some play in the joints, because it has to deal with complex problems which do not admit of solution through any doctrinaire or straight jacket formula and this is particularly true in case of legislation dealing with economic matters, where, having regard to the nature of the problems required to be dealt with, greater play in the joints has to be allowed to the legislature. The Court should feel more inclined to give judicial deference to legislative judgment in the field of economic regulation than in other areas where fundamental human rights are involved. Nowhere has this admonition been more ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of such legislation by the generality of its provisions and not by its crudities or inequities or by the possibilities of abuse of any of its provisions. If any crudities, inequities or possibilities of abuse come to light, the legislature can always step in and enact suitable amendatory legislation. That is the essence of pragmatic approach which must guide and inspire the legislature in dealing with complex economic issues." The said decision has been followed subsequently by the Apex Court in the case of State of Kearala v. Builders Association of India reported in (1997) 104 STC 134, wherein in the context of levy of compounding tax in respect of works contract, a contention was raised that the levy of two percent tax on the whole amount of the contract or a particular rate applied to the entire value of the contract and not merely upon the value of the goods transferred in the course of execution of works contract is invalid. The Court after noticing the position that the goods, which were transferred in the course of execution of works contract might be declared goods, they might be goods which were liable to be taxed under the Central Sales Tax Act, the goods so transferre ..... X X X X Extracts X X X X X X X X Extracts X X X X
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