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M.A. Jackson Vs. Collector of Customs [1997] INSC 572 (8 July 1997)

S.P. BHARUCHA, SUHAS C. SEN, M. JAGANNADHA RAO.

ACT:

HEADNOTE:

M. JAGANNADHA RAO, J.

This appeal has been preferred by the appellant against the judgment of the Customs. Excise and Gold General Appellate Tribunal (Special Bench A. New Delhi thereinafter called the CEGAT) dated 30.11.1988 dismissing the appeal of the appellant with a slight modification in favour of the appellant.

The facts of the case are as follows:- The appellant returned to India in 1984 from Dubai transfer of residence availing benefits of the Transfer of Residence Rules, 1978. While coming path from Dubai. She brought along with her. One use Volvo car 244 GLE Model 1982 which was under her use in Dubai, This Ear had been purchased by the appellant's husband on 10.3.1982 under involve No. 216 10.3.1982 from one achd Abdul Rahman A G Bahar, Sharjah for 30.000 Dirhanis (use) which include 10% dealers commission and see-freight charges from Sweden to Dubai. Apart from duty. clearance. Transport and bank charges at the rate of the Appellant filed a Bill of Entry 219/8.12.1984 at the Inland container Depot. Bangalore The customs authorities assessed the value of the car at Rs. 53.305.44 and assessed duty at 150% ( Rs. 70,000,00 according to the appellant the above assessable value was arrived at by giving 15% discount as against normal discount at 20% otherwise available in the Middle East countries and depreciation was worked out only at 35.5% instead of 38% . The appellant paid the duty under protest on 8.12.1984 and obtained clearance of the vehicle on the same date. Appellant wrote a detailed letter on 30.1.1985 requesting refund of alieged excess amount of duty paid by her.

A show- cause notice dated 7.6.1985 was issued by the Superintendent of customs. Bangalore, under section 20 (1) of the Customs Act. 1982 asking the appellant to show- cause against alleged short levy of customs duty of Rs. 1,40,170,70 which was worked out on the basis that the assessable value of the car was Rs. 1,12,409 rather than Rs. 99,809,44 P. The appellant sent a reply stating that the duty payable had already been paid that the value of the car in UAE was always 20% higher than the actual price of the vehicle in the counting at origin and that in the absense of the manufacturer's price which was not readlly available, she had paid the duty as assessed, under protest, to avoid demurrage and that no details have been given in the show- causes notice as to how the basis of alleged short levy was arrived at.

After 2 years and 3 monts. the appellant received an order dated 20.8.1997 from the Assistant collector of customs . Inland Container Depot, Banglore. In that orde.

it was mentionde that a comparison was made with a " pride list" and axxordingly. the assessable value was reworked at Rs. 96,850 as against the proposes assessable value of Rs. 1,21,803 mentioned in the show cause notice.

The order statedc that the additionel duty payable was Rs. 89,715,91 rather than Rs. 1,40,163.75 propose in the show cause notice. Appeal was preferred before the collector ( Appelas ) Madras contending , interalia. that there was no reason to reject Volva'a letter dated 5.11.1985 that the appelaants were not shown the world Car catalogue or Auto car magazins Appeal was dismissed in b, cus, 889/87 dated 18.11.1987, The appellant filed and appeal nbefor ther CEGAT contanding that the price-lists referred to in the order of the collector werer not disolosed to the appellant, there was no short levy of duty and the additional levy was time barred. The appellant contended that there was an reason not to accept the invoice price submittecd by the appellant or Volvo's letter dated 5.11.1985, However , the CEGAT dismissed the appeal by order No, 580 of 1988(A) dated 21.11.1988. It is against the said order tht this appeal has been preferred under 745 (L) of the Castoms Act. 1982.

We have heard the arguments of the learned counsel for the appellant. he submitted that no reasons were given by the authorities as to why the manufacturer's certificate dated 5.11.1985 was not accepted. The price atated in the Auto Car magazine was not even referred to in the show- cause notice, not was a copy thereof furnished to the appellant at any time either cerore the Assistant Collector or the collector (Appeas m or before the CEGAT. Only an extract of the prices mentioned in the Auto car magazine was given to the CEGAT. It is contended that there are no grounds for raising the assessable value.

In this aspecial leave petition no reply has been filed by the respondents to deny the fact that the magazine which was referred to in the order of the Assistnat collector or in the order of the Calleotar was applied to the petitioner. The magazine was not referred to in the show cause notice. A reading at the under at the CEGAT show that an extriact of the priceslist of the magazine was pleced before the CEGAT for the first time. the CEGAT accepted the use tharedal by the customs authorities in their orders so far as the certificate regarding price issued by the manufacture submitted by the petitioner was conoerned. the CEGAT ignored the same as it was issued after the actual purchase of the car by the importer.

In our view. Once it is admitted that the price mentioned in the magazine was not mentioned in the show cause notice issued to the petitoner . any reliance on the said price mentioned in the megazine by the customs authorities must be held to be illegal. Further it is clear that thought this point was taken in the grounds of the appeal before the apellate authorities. a copy of the amgazine wa snever made avaliable to the patitioner. The fact that an extract of the relevant portion thereof was produced before the CEGAT for the first time, does not in our opinion cure the defect. so far as the manufacturer's certificate is cancerned naither in the crder4e of the customa authorities nor in the order of the CEGAT is there a finding that the price mantioned in the said certificate was not the correct one of that the certificate was obtained coilusiveluy from the foraign manufacturer. We may aled point out that there is no finding by the customs auathoriris that the price which has been adopted by the culstoms authorities wa sreferable to a car of the indential make, madel, facilities or gadgets as the one imported. For the aforesaid reasons, the order of the CEGAT and of the customs authriries cannot be supported.

We accordingly, set aside the orders of the CEGAT as well as the Customs authorities in as far as they are against the appellant and quash the show cause notice issued on 17.6.1985 unde rsection 28(1) of the customs Act.

1962. The appeal is allowed but in the circumstances without costs.

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