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HIGH COURT OF CALCUTTA
A. N. Ray
RAMCHAND JAGDISHCHAND - Appellant
Versus
THE DEPUTY COLLECTOR OF CUSTOMS, CALCUTTA - Respondent
Matter 115 Of 1960
Decided On : MAY 04, 1961
CUSTOMS - Valuation - Real value - Determination - Section 30 (b) of the Sea Customs Act, 1878 - Applicability - Conditions - Exhaustion of Section 30 (a) - Wholesale cash price - Ascertainability - Burden of proof - Order of Deputy Collector of Customs - Legality - Personal hearing - Necessity - Divided responsibility - Refund of penalty and increased duty - Power of Court.
Fact of the Case:
Petitioner imported woollen fabrics from Germany through a clearing agent. The petitioner submitted the necessary documents, including the Bill of Entry, to the Assistant Collector of Customs, Appraisement. The petitioner was later served with a notice alleging mis-declaration of the goods and proposing confiscation and penalty. The petitioner responded to the notice and requested a personal hearing, which was granted. The Deputy Collector of Customs held that the correct c.i.f. value of the goods was higher than declared and ordered confiscation of the goods with an option to redeem on payment of a fine. The petitioner paid the customs duty and penalty under protest and took delivery of the goods.
Finding of the Court:
1. Section 30 (b) of the Sea Customs Act, 1878, can only be invoked to determine the real value of imported goods if 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 is not ascertainable under Section 30 (a) of the Act. 2. The burden of proving that the conditions for applying Section 30 (b) are fulfilled lies on the Customs authorities. 3. The order of the Deputy Collector of Customs was illegal as it was based on Section 30 (b) without exhausting the provisions of Section 30 (a). 4. The documents relied upon by the Customs authorities to determine the real value under Section 30 (b) were insufficient and did not provide any evidence to support the order. 5. The order of the Deputy Collector of Customs was also illegal as the petitioner was not given a personal hearing by the officer who passed the order. 6. The Court has the power to order a refund of penalty and increased duty levied under an illegal order of confiscation and penalty.
Issues: 1. Whether Section 30 (b) of the Sea Customs Act, 1878, can be applied without exhausting the provisions of Section 30 (a). 2. Whether the Customs authorities had sufficient evidence to determine the real value of the imported goods under Section 30 (b). 3. Whether the petitioner was denied a personal hearing in violation of the principles of natural justice. 4. Whether the Court can order a refund of penalty and increased duty levied under an illegal order of confiscation and penalty.
Ratio Decidendi: 1. The provisions of Section 30 (b) of the Sea Customs Act, 1878, do not apply until and unless 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 is not ascertainable under Section 30 (a). 2. The Customs authorities have the burden of proving that the conditions for applying Section 30 (b) are fulfilled, including that the wholesale cash price under Section 30 (a) is not ascertainable. 3. Personal hearing is a fundamental principle of natural justice, and an order passed without giving the petitioner a personal hearing is illegal. 4. The Court has the power to order a refund of penalty and increased duty levied under an illegal order of confiscation and penalty.
Final Decision: The Court quashed and set aside the order of the Deputy Collector of Customs and directed the Customs authorities to refund the amount paid by the petitioner as penalty and increased duty.
( 1 ) MESSRS. Ramchand Jagdishchand obtained this Rule calling upon the respondents to show cause why a Writ of Certiorari should not be issued for quashing the order dated April 20, 1960 and further for a Writ of Mandamus requiring the respondents to forbear from giving effect to the order and also for a Rule as to why a Writ of Mandamus should not be issued directing the respondents to refund the sum of Rs. 20,818. 25 as mentioned in the petition.
( 2 ) THE petitioner on or about May 22, 1959, placed an order for supply of 8 cases of woollen fabrics with Messrs. K. Jos Otten of Germany through Messrs. T. S. Narang of Bombay at the rate of 20 shilling per yard. The goods arrived at the Port of Calcutta and were thereafter landed at the said port on or about August 28, 1959. On arrival of the goods the petitioner through its Clearing Agent, on September 5, 1959, submitted to the Assistant Collector of Customs, Appraisement, respondent No. 2 above named, the necessary documents, namely, Bill of Lading, Invoice and the Bill of Entry, wherein the real value, quantity and description of the goods were stated along with a declaration that the statements contained in the Bill of Entry were correct. The total value of the goods imported was shown as Rs. 22,893. 73 np.
( 3 ) ON or about 12/13 February, 1960, a notice was served on the petitioner that the correct c. i. f. value of the goods should be 24 sh. per yard c. i. f. and the petitioner was asked to show cause why the goods should not be confiscated and a penalty should not be imposed. On 18 February, 1960, tie petitioner asked the Assistant Collector of Customs, Appraisement, to be informed on what basis the examination had been conducted by the respondent to arrive at 24 sh. price per yard and further stated that on receipt of the information the petitioner would reply to the notice of the Customs authorities. On 20 February, 1960, the petitioner further informed the Assistant Collector of Customs, Appraisement, that the petitioner desired to be heard in person.
( 4 ) ON March 14, 1960, a further notice was served on the petitioner wherein it was alleged that on further enquiry it had been found that the correct assessable value of the goods was Rs. 33,728 calculated at the rate of 295. 6d. per yard and it was further alleged in the notice that the basis of the valuation was contained in four documents, namely, (a) copy of advice dated May 22, 1959. made out by T. S. Narang in the name of V. Jamnadas and Co. , showing c. i. f. value of 293. 6d. per yard, (b) letter dated December 24, 1959, from T. S. Narang to the Assistant Collector of Customs, Bombay, (c) letter dated February 6, 1960, from T. S. Narang to the Assistant Collector of Customs, Bombay confirming that the c. i. f. values mentioned in letter dated December 24, 1959 ( (b) above) were the lowest correct c. i. f. values of the qualities mentioned during the year 1959 and (d) A cable dated February 4. 1959, addressed to T. S. Narang by Messrs. K. Jos Otten of Germany.
( 5 ) ON March, 22, 1960, the petitioner gave a reply. On March 25, the petitioner was informed by the Principal Appraiser that a personal hearing would be given on March 31, 1960. On March 31, there was personal hearing at which the petitioner's partner was present along with its representative. On April 20, 1960, the respondent No. 1, Deputy Collector of Customs, held that the correct c. i. f. value of the goods was 295. 6d. per yard and that the goods had been deliberately mis-declared. The goods were ordered to be confiscated under Section 167 (37) of the Sea Customs Act with an option to redeem the goods on payment of a fine of Rs. 9,890. A personal penalty of Rs. 1,000 was imposed on the petitioner and was directed to be paid forthwith. On April 26. 1960, the order of the Deputy Collector of Customs was sent to the petitioner. On May 10, 1960, the petitioner under protest and without prejudice to his right paid the Customs duty
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