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2019 Supreme(SC) 603
SUPREME COURT OF INDIA
Ranjan Gogoi, CJI., Deepak Gupta, Sanjiv Khanna, JJ.
CENTURY METAL RECYCLING PVT. LTD. AND ANOTHER — Appellant(s)
Versus
UNION OF INDIA AND OTHERS — Respondent(s)
Civil Appeal No. 5011 of 2019 (Arising Out Of Special Leave Petition (Civil) No. 33602 of 2017).
Decided on : 17-05-2019
For the Appellant :Chirag M. Shroff, Advocate,
For the Respondent:B. Krishna Prasad, Advocate
IMPORTANT POINT
If the declared transaction value is not accepted the reasons therefore are to be recorded and disclosed/communicated to the importer.
Headnote:(a) Constitution of India - Articles 226 and 136 - Availability of alternative statutory remedy - Ground for not exercising power under Article 226 - However in appropriate cases appeal under Article 136 can be entertained despite dismissal of writ petition on the ground of availability of alternative remedy. (Para 5)
Civil Appeal Nos. 18300-18305 - Relied upon
(b) Customs Act, 1962 - Section 14 r/w Rules 3 and 12, Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 - Payable - Refers to the particular transaction and the payability in respect of `the transaction' - To notional value and not transaction value as declared in bill of entry. (Para 7)
(2001) 1 SCC 315 - Referred
(c) Customs Act, 1962 - Section 14 r/w Rule 10, Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 - Deemed transaction value - Value and price of costs and services are to be added to the price actually paid or payable for the imported goods. (Para 9)
(2001) 1 SCC 315; Civil Appeal Nos. 18300-18305 of 2017; (2007) 6 SCC 373 - Referred
(d) Customs Act, 1962 - Section 14 - Section 14(2) starts with non-obstante clause - Notification issued u/s 14(1) fixing tariff will prevail upon transactional value as per section 14(1) Instantly no notification issued u/s 14(2) - Provisions of section 14(1) will apply. (Para 10)
(e) Customs Act, 1962 - Section 14(1) - Conditions specified in second proviso satisfying, transactional value for the purpose of charging of customs duty is to be made as per the rules. (Para 11)
(f) Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 - Rules 3 and 12 - Transaction value as declared may not accepted by proper officer if he has reason to doubt the truth or accuracy of the value declared for the imported goods - Proper officer can reject the value declared for the imported goods giving reasons. (Para 14, 15, 16)
(g) Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 - Rule 12 - Reason to doubt - Cannot be equated with requirements of positive reasons to believe - The doubt must be reasonable - Subjecting imports to detailed enquiry on mere ipse dixit or suspicion because one is distrustful and unsure without reasonable and certain reasons - Contrary to the scheme and purpose behind the provisions aiming to ensure quick and expeditious clearance of imported goods. (Para 17, 18)
(h) Customs Act, 1962 - Section 18 and Rule 12(2), Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 - Intimation to importer of reasons of forming an opinion regarding reasonable doubt as to truth or accuracy of valuation - Mandatory. (Para 20, 21, 22,)
(2010) 13 SCC 535 - Relied upon
(i) Customs Act, 1962 - Section 18 and Rule 12(2), Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 - Appellant declaring value of the aluminium scrap as Rs. 81.31 per kg - Revenue rejecting the same on the ground that contemporaneous import data showed a rate of Rs. 83.26 to Rs. 120.897 per kg - The order at the same time stating that values of aluminium scrap identical/similar to the imported goods in nature and specification were not available - Held, mandate of Section 14 and the Rules were not followed. (Para 23)
Civil Appeal Nos. 18300-18305 - Referred
(j) Customs Act, 1962 - Section 14, 18 and Rule 12(2), Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 - The Valuation Alerts - Providing guidance in valuation matters - Should not be construed as interfering with the discretion of the assessment authority - Proper officer has to give reasons and, if requested, disclosed/ communicated to the importer. (Para 25)
(2009) 3 SCC 365 - Relied upon
Facts of the case:
Appellants filed a writ petition before the High Court praying for:
“Issue a suitable writ, order or direction in the nature of MANDAMUS commanding the Assessing Officer that Respondent No.2 and his subordinate officers to make assessment of aluminium scrap being imported by the petitioner on the basis of the declared transaction value in accordance with statutory provisions under Section 14 & 17(1) of the Customs Act, and in case of non-acceptance, to allow Provisional Assessment thereof under Section 18 of the Customs Act in accordance with Circular No.38 dated 22.08.2016 (Annexure-5)"
High court dismissed the petition on the grounds that the High Court would not exercise extraordinary jurisdiction under Article 226 of the Constitution of India as the matter relates to the valuation of imported aluminium scrap which could be assailed in a statutory appeal and it would not be appropriate for the writ court to decide whether the appellant had or had not agreed to valuation by the customs authorities.
Finding of the Court:
The order in original is not in accordance with Section 14 and Rules 3 and 12.
Result: Appeal allowed.
JUDGMENT :
Sanjiv Khanna, J.
Leave granted.
2. Impugned order dated 12th September, 2017 passed by the Division Bench of the High Court of Judicature at Allahabad dismisses Writ Petition Tax No.307 of 2017 filed by the appellants, namely M/s Century Metal Recycling Pvt. Ltd. and Gauri Shankar Agarwala, inter alia, on the grounds that the High Court would not exercise extraordinary jurisdiction under Article 226 of the Constitution of India as the matter relates to the valuation of imported aluminium scrap which could be assailed in a statutory appeal and it would not be appropriate for the writ court to decide whether the appellant had or had not agreed to valuation by the customs authorities.
3. The appellant Company is stated to be engaged in the manufacture of aluminium alloys, for which they regularly import aluminium waste as a raw material for self-consumption. Imported scrap, it is accepted, falls under different code names as per specifications of the Institute of Recycling Industry. The grievance raised by the appellants is that the 2nd respondent i.e. the Principal Commissioner of Customs, Noida Customs Commissionerate and its Officers almost uniformly do not clear the consignments as per the declared transaction value in the bill of entry but insist that the appellants write a letter agreeing to pay customs duty as per the valuation by the customs authorities and compel them to forego their right to provisional assessment under Section 18 of the Customs Act, 1962 (`the Act', for short). The appellants, coerced and intimated, have no option but to give in and issue a letter of consent agreeing to assessment/valuation by the customs authorities to avoid delay in clearance, levy of demurrage, ground rent and container detention charges, etc. It is also alleged that the respondents without observing and contrary to the mandate of Section 14 of the Act discard the declared transactional value and recompute the consignment value in view of the Valuation Alert dated 1st December, 2016 issued by the Central Board of Excise and Customs (`the Board', for short).
4. At the outset, we would record that the appellants had given up prayers (a) and (b) before the High Court as is recorded in the impugned order and we are, therefore, primarily to confine our decision to prayer (c) of the Writ Petition which reads as under:
"In the aforesaid facts and circumstances of the petitioner respectfully prays that this Hon'ble Court may be graciously pleased to:
(c) Issue a suitable writ, order or direction in the nature of MANDAMUS commanding the Assessing Officer that Respondent No.2 and his subordinate officers to make assessment of aluminium scrap being imported by the petitioner on the basis of the declared transaction value in accordance with statutory provisions under Section 14 & 17(1) of the Customs Act, and in case of non-acceptance, to allow Provisional Assessment thereof under Section 18 of the Customs Act in accordance with Circular No.38 dated 22.08.2016 (Annexure-5)"
We would for the reasons stated also examine validity of the adjudication order dated 7th April, 2017.
5. We are not inclined to remit the appellant to an alternative remedy by way of statutory appeal under Section 128 of the Act for the reason that the impugned order dated 7th April, 2017 in Assessment No.12/AC/CUS/2017 cannot be sustained in view of the decision of this Court in Commissioner of Central Excise and Service Tax, Noida v. M/s Sanjivini Non-Ferrous Trading Pvt. Ltd. Civil Appeal Nos. 18300-18305 of 2017 decided on December 10, 2018, the latter being the sister concern of the first appellant in this case. Further, having heard learned counsel for the parties, we would like to clarify the legal position and therefore in the facts of this case would exercise our discretion to entertain this appeal despite the alternative remedy.
6. We would begin by reproducing Section 14 of the Act and Rules 3 and 12 of the Customs Valuation (Determination of Value of Imported
