VACUUM OIL COMPANY Vs. SECRETARY OF STATE FOR INDIA

JUDGEMENT

(1.) The appellants, an American company, with headquarters in New York, are engaged in the manufacture of various grades of oil used in the lubrication of machinery. One of their specialities is an oil known as " Mobiloil" specially manufactured for the lubricating of motor cars. Large quantities of "Mobiloil" are imported into India and are sold by the appellants to retailers in one gallon tins. No question, however, is in these proceedings raised as to any oils so imported and sold. They were the subject of another suit to be referred to later. This case is concerned only with the import duties on the appellants machinery lubricating oils, including incidentally "Mobiloil" in drums or barrels, which are imported into India through the Port of Bombay and are thereafter sold by the appellants direct to consumers. The dispute is as to the proper basis upon which these imported oils are assessable to duty under the Sea Customs Act, 1878. Since such an issue must ultimately depend upon the true effect of that Act as applied to the oils in question, it will be convenient to set forth at once the material provisions of the sections in point. They are numbered 29 and SO, and are as follows:- Section 29. On the importation into... any Customs-port of any goods, whether liable to duty or not, the owner of such goods shall, in his bill of-entry...state the real value, quantity and description of such goods to the best of his knowledge and belief, and shall subscribe a declaration of the truth of such statement at the foot of such bill. In case of doubt, the Customs collector may require any such owner or any other person in possession of any invoice, broker's note, policy of insurance or other document, whereby the real value, quantity or description of any such goods can be ascertained, to produce the same, and to furnish any information relating to such value, quantity or description which it is in his power to furnish. And thereupon such person shall produce such document and furnish such information.... Section 30, For the purposes of this Act the real value shall be deemed to be- (a) the wholesale cash-price, less trade discount, for which goods of the like kind and quality are sold, or are capable of being sold, at the time and place of importation...without any abatement or deduction whatever, except ...of the amount of the duties payable on the importation thereof : or (b) where such price is not ascertainable, the cost at which goods of the like kind and quality could be delivered at such place, without any abatement or deduction except as aforesaid.

(2.) Now oil is amongst the " gooda subject to duty", the amount of the duty to be charged being made dependent as above appears upon the " real value " of the oil imported. And the contention of Government has been and is that in terms of the Act " the real value " of the appellants oil is its " wholesale cash price " referred to in Section 30(a), a price ascertainable, so it is said, without difficulty. To this the answer of the appellants is, that in view of the unique character of their machinery oil and of the invariable course of business pursued by them in relation to its sale, a wholesale cash price " for that oil has never existed and is not ascertainable and that accordingly its real value must, for the purpose of duty, be determined in accordance with Section 30(6) of the Act involving a result relatively favourable to themselves.

(3.) Before 1923 these oils of the appellants had always been assessed at Bombay on the principle so contended for by them. In 1923, however, the Customs authorities claimed, as their right under the Act, to assess the oils on the basis of their "wholesale cash price," and in due course the action out of which this appeal arises was brought by the appellants to test the validity of that claim. In the proceedings the appellants complaint has been that on this new and erroneous principle they have been charged with and have been compelled to pay duty in excess of what was lawful. Their claim has been to recover the excess so paid. At the trial the appellants view prevailed with Blackwell J., who, sitting as a Judge of first instance in the High Court of Judicature at Bombay, gave judgment for the appellants by a decree of April 5, 1929. His decree, however, was on August 5, 1930, reversed on appeal by the same High Court, which then dismissed the action. By their present appeal, the appellants seek to have the decree and judgment of Blackwell J. restored,