Judgement

Appeal (No. 114 of 1936) from a decree of the High Court in its appellate jurisdiction (October 4, 1935), affirming, with a minor variation, a decree of the High Court in its original civil jurisdiction (April 5, 1935).

The question for determination in this appeal was whether in assessing to customs duty under the Indian Sea Customs Act, 1878, a number of Ford motor vehicles consigned from Canada to the appellants, the Ford Motor Company of India, Ld., the wholesale price for such vehicles was ascertainable so that the duty could be assessed under cl. (a) of s. 30 of the Act of 1878, or whether the vehicles were assessable under cl. (b) of s. 30 upon the cost at which they could be landed in Bombay —namely, the invoice price, plus freight and insurance. Delivery of the vehicles was given by the appellants "free" on rail to authorized distributors who paid to the appellants the price they (the distributors) received from the public less a discount of 20 per cent. The appellants were assessed to customs duty by the Collector of Customs on the view that cl. (a) of s. 30 of the Act of 1878 applied, and that the price charged by the appellants to the distributors was a wholesale cash price, less trade discount, as specified in cl. (a).

The facts, and the terms of s. 30 (a) and (b) of the Sea Customs Act, 1878, appear from the judgment of the Judicial Committee.

The trial judge (Tyabji J.) held that the motor vehicles were in the circumstances assessable under cl.

(a) of s. 30, but that the words in the section "at the time and place of “importation” in effect necessitated that the price should have reference to the sale of the goods ex ship.

On appeal by both parties (the present respondent being the Secretary of State for India in Council) a Division Bench (Beaumont C.J. and Blackwell J.) held that the assessment made by the customs authorities was correct, and that the appellants suit for a return of duty alleged to have been overpaid should be dismissed. The appeal is reported at ( 1936) I. L. R. 60 B. 551.

1937 Oct.25, 26, 28 Sir William Jowitt K.C., and Sir Thomas Strangman for the appellants. Sect. 30 of the Sea Customs Act, 1878, must be read as a whole, and, if cl. (a) is to be applied, there must be found the wholesale cash price for which goods—not these particular goods, but goods which are of the like kind and quality—are sold, or are capable of being sold, and that sale of those corresponding goods must be viewed at the time and place of importation without an abatement or reduction. For a considerable time the appellants were allowed to import their motor vehicles under cl. (b), and they

Law. Rep. 65 Ind. App. 32 ( 1937- 1938) Ford Motor Company of India Limited v. Secretary of State

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paid duty on the c.i.f. value, that is, the f.o.b. price which they paid to their Canadian manufacturers, plus freight and insurance. The only persons to whom the appellants sell motor vehicles in India are the appointed distributors, to whom particular districts have been allotted, and who have in advance informed the appellants of the exact number of vehicles they require. The crucial difference between

cl. (a) and cl. (b) of s. 30 is that whereas (b) is looking at the cost, (a) is directed towards sale. In these particular circumstances the price at which these vehicles are sold by the appellants to the distributors is that which is arrived at in consequence of their organization and their finding out from the distributors exactly how many vehicles they want to satisfy requirements. It is quite wrong to infer from that that there is any sort of price applicable to the genus of which these vehicles are but a species, and say that there is therefore a wholesale cash price for goods of the like kind and quality at the time and place of importation. Clause (a) is quite inappropriate in the present circumstances. The reference in s. 30 to goods "of the like kind and quality" is to ensure that in dealing with specific goods re