OSWAL WOOLLEN MILLS LTD , LUDHIANA Vs. ASSTT COLLECTOR OF CUSTOMS, BOMBAY AND OTHERS
LAWS(DLH)-1983-9-43
HIGH COURT OF DELHI
Decided on September 23,1983

OSWAL WOOLLEN MILLS LTD , LUDHIANA Appellant
VERSUS
ASSTT COLLECTOR OF CUSTOMS, BOMBAY AND OTHERS Respondents





Cited Judgements :-

COMMISSIONER OF CUSTOMS (IMPORT) VS. LENZE MECHATRONICS PVT. LTD. [LAWS(CE)-2015-9-2] [REFERRED TO]


JUDGEMENT

- (1.)Messrs Oswal Woollen Mills Ltd., Ludhiana, the petitioner, applied to the Textile Commissioner, Bombay, for grant of essentiality certificate for the import from Italy of one Tentering Machine used for the manufacture of woolen. Along with the petitioner submitted a proforma invoice of the Italian manufacturers, the Asienda Termotecnica Italiana (ATI) Milan, Italy, showing the value of the machine at U.S. $ 34,000. On the basis of the said application the petitioners were ultimately granted an import licence dated January 19, 1967 for $ 3,30,500/- (on devaluation basis) by the Joint Controller of Imports and Exports, Bombay. The petitioners, it is alleged, while negotiating with the representatives of the manufacturers, requested for the reduction in the price by 20 per cent. The manufacturer's representative agreed to the reduction and sent the manufacturer's acceptance as per their letter dated March 17, 1966 (Annexure B) reducing the price from U.S. $ 34,000 to U.S. $ 28,000. The contract for the purchase of the machine from U.S. $ 28,000 c.i.f. was approved by the Government of India, Ministry of Finance (Department of Economic Affairs) vide their letter dated October 28, 1966 (Annexure C). The petitioners retained the documents of the suppliers and passed them to their clearing agents for clearance of the consignment after payment of the necessary duty. While processing the documents, the Assistant Collector of Customs, Bombay found that the suppliers had offered the machine for sale at U.S. $ 34,000 but the value of the machine in the invoice had been shown as U.S. $ 28,000. After examining the correspondence the Assistant Collector of Customs vide order dated November 14, 1967 (Annexure A) observed that the petitioners had been allowed a special discount of 20 per cent as a very special case. Special discount was not admissible as per customs valuation rules. He consequently determined the value at U.S. $34,000 under rule 8 of the Customs Valuation Rules, 1963 and Section 14(1) of the Customs Act, 1962 . The appeal filed by the petitioner was dismissed by the Appellate Collector of Customs on January 22, 1969 (Annexure D). The revision was dismissed by the Government of India on August 23, 1970 (Annexure E).
(2.)Feeling aggrieved the petitioners filed the present petition under Article 226 of the Constitution of India for quashing the said assessment orders and directing the respondents to refund the sum which was levied in excess under the impugned orders. It was averred that the quoted price of U.S. $ 34,000 was an exploratory quotation and was not a firm offered price within the meaning of Section 14(1) of the Customs Act. A special trade discount had nothing to do with the tariff value to be determined under Section 14 of the Act and the tariff value was to be determined on the actual price at which the machine was sold. The respondents had not exercised the power in accordance with law but it had been exercised capriciously, arbitrarily, without reference to or nexus with the material and evidence and contrary to the rules governing the exercise of best judgment. The impugned orders were vitiated by total absence of evidence. There was no finding that the sale was not a genuine transaction or that the seller and buyer had any interest in each other or each other's business or that the petitioners had paid more than U.S. $ 28,000. The Government of India failed to consider the letter dated December 72, 1969 (Annexure G) received from the Italian sellers which letter had been filed before them.
(3.)The respondents in the reply affidavit averred that the findings of the authorities were the findings of fact and were not open to be questioned in these proceedings. There was no error apparent on the face of the record and the petitioners were not entitled to invoke the jurisdiction of this Court under Article 226 of the Constitution. The petitioners were guilty of unexplained inordinate delay. On merits it was averred that no material was produced to show that the price was scaled down to U.S. $ 28,000 due to the negotiations. On the other hand, it was reduced at the personal meeting with the principal's representatives. Such discount was not admissible under Section 14(1) of the Customs Act. No fresh evidence could be produced at the revisional stage. Letter dated December 12, 1969 came into existence after the orders had been passed by the Assistant Collector of Customs and upheld in appeal. The value of the machine has been determined in accordance with the provisions contained in Section 14(1) and rule 8 and the orders were legal.
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