M. A. Jackson vs Collector Of Customs

Judicial Analysis Court Copy Headnote Facts Arguments Court observation

1997 Supreme(SC) 903

1997(6) Supreme 354
SUPREME COURT OF INDIA
S.P. Bharucha, Suhas C. Sen and M. Jagannadha Rao, JJ.
M.A. Jackson -Appellant
versus
Collector of Customs -Respondent
Civil Appeal No. 2885 of 1989
Decided on 8-7-1997
Counsel for the Parties :
For the Appellant : Rajiv Dutta, Advocate.
For the Respondent : N.K. Bajpai, and Narasimhan, Advocates.

Headnote:Customs Act, 1982-Section 28(1)-Show cause notice against alleged short levy of customs duty-Challenged-Appellant returned to India in 1984 from Dubai on transfer of residence-She brought along with her, one used Volvo Car which was under her use in Dubai-Customs authorities assessed value of car of Rs. 53,305.44-Duty assessed at Rs. 1,20,100/-Appellant paid duty under protest-Notice u/s 28(1) alleging short levy of customs duty-Appeal contending that price lists referred to in order were not disclosed to appellant-Price mentioned in Auto Car Magazine not mentioned in show cause notice-Any reliance on that price by Custom authorities held illegal-A copy of Magazine never made available to petitioner-No finding that price mentioned in manufacturer s certificate was not correct-Order of CEGAT and of Customs authorities not sustainable-Show cause notice u/s 28(1) quashed.
       Held : The magazine was not to in the show cause notice. A reading of the order of the CEGAT shows that an extract of the price-list of the magazine was placed before the CEGAT. Though an extract from the magazine was placed before the CEGAT for the first time, the CEGAT accepted the use thereof by the Customs authorities in their orders. So far as the certificate regarding price issued by the manufacturer submitted by the petitioner was concerned, the CEGAT ignored the same as it was issued vears after the actual purchase of the car by the importer. (Para 7)
       Once it is admitted that the price mentioned in the magazine was not mentioned in the show cause notice issued to the petitioner, any reliance on the said price mentioned in the magazine by the Customs authorities must be held to be illegal. Further it is clear that though this point was taken in the grounds of the appeal before the appellate authorities, a copy of the magazine was never made available to the petitioner. The face 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 concerned; neither in the orders of the Customs authorities nor in the order of the CEGAT is there a finding that the price mentioned in the said certificate was not the correct one or that the certificate was obtained collusively from the foreign manufacturer. We may also point out that there is no finding by the Customs authorities that the price which has been adopted by the Customs authorities was referable to a car of the idential make, model, facilities or gadgets as the one imported. For the aforesaid reasons, the order of the CEGAT and of the Customs authorities cannot be supported. (Para 8)

JUDGMENT

M. Jagannadha Rao, J.-This appeal has been preferred by the appellant against the judgment of the Customs. Excise and Gold Control Appellate Tribunal (Special Bench A). New Delhi (hereinafter called the CEGAT) dated 30.11.1988 dismissing the appeal of the appellant with a slight modification in favour of the appellant.

2. The facts of the case are as follows:-

The appellant returned to India in 1984 from Dubai on transfer of residence availing benefits of the Transfer of Residence Rules, 1978. While coming back from Dubai, she brought along with her, one used Volvo Car 244 GLE Model 1982 which was under her use in Dubai. This car had been purchased by the appellant s husband on 10.3.1982 under Invoice No. 216, 10.3.1982 from one Mohd. Abdul Rahman AC Bahar, Sharjah for 38,000 Dirhanis (UAE) which included 10% dealer s commission and sea-freight charges from Sweden to Dubai, apart from duty, clearance, transport and bank charges at the rate of 7%. Appellant filed a Bill of Entry 213, 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. 70,058.19), Auxiliary duty at 10% (Rs. 21,322.18) and Additional duty of Customs (Rs. 24, 915.75), in all, Rs. 1,20,100. According to the appellant, the above assessable value was arrived at by giving 15% discount as against normal discount at 10% 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 alleged excess amount of duty paid by her.

3. A show-cause notice dated 7.6.1985 was issued by the Superintendent of Customs, Bangalore, under Section 28 (1) of the Customs Act, 1982 asking the appellant to show-cause against alleged short levy of customs duty of Rs. 1,10,174.70 which was worked out on the basis that the assessable value of the car was Rs. 1,21,903 rather than Rs. 53,305.44 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 country of origin and that in the absence of the manufacturer s price which was not readily available, she had paid the duty as assessed, under protest, to avoid demurrage and that no details have been given in the show-cause notice as to how the basis of alleged short levy was arrived at.

4. After 2 years and 3 months, the appellant received an order dated 21.8.1997 from the Assistant Collector of Customs. Inland Container Depot, Bangalore. In that order, it was mentioned that a comparison was made with a "price list" and accordingly, the assessable value was reworked at Rs. 86,850 as against the proposed assessable value of Rs. 1,21,603 mentioned in the show cause notice. The order stated that the additional duty payable was Rs. 89,719.91 rather than Rs. 1,40,163.75 proposed in the show cause notice. Appeal was preferred before the Collector (Appeals), Madras contending, inter alia, that there was no reason to reject Volvo s letter dated 5.11.1985, that the appellants were not shown the World Car Catalogue or Auto Car Magazine. Appeal was dismissed in B. Cos. 959/87 dated 18.11.1987.

5. The appellant filed an appeal before the CEGAT contending that the price-lists referred to in the order of the Collector were not disclosed to the appellant, there was no short levy of duty and the additional levy was time barred. The appellant contended that there was no reason not to accept the invoice price submitted 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 that this appeal has been preferred under 745 (L) of the Customs Act, 1982.

6. We have heard the arguments of the learned counsel for th

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