The mode of valuation prescribed in Section 14 of the Customs Act is applicable whenever a duty of customs is chargeable on any goods by reference to their value.

S. K. MUKHERJEE, J.

( 1 ) THIS appeal is directed against a judgment and order of K. L Roy, J. on August 28,1970, by which his Lordship disposed of a Rule. By the said Rule, the petitioner Bird and Co. (Pvt.) Ltd. challenged certain notices issued by the Collector of Customs and Central Excise under Section 28 (1) and an order made under Section 28 (2) of the Customs Act, 1962.

( 2 ) THE petitioner, who is the appellant before us, carries on business, Inter alia, of export of jute specialities. These jute specialities are jute manufactures within the meaning of Item 2 of the Second Schedule to the Indian Tariff Act. Under the said item, duty is payable on the said goods at he rate of Rs. 500 per tonne.

( 3 ) BY a notification dated June 19,1968, issued under Sub-section (1) of Section 25 of the Customs Act, the Government of India exempted the articles specified in Column 2 of the table appended to the said notification from so much of the duty leviable thereon as was in excess of the duty leviable at the rate specified in Column 3 of the said table. The rate for jute specialities prescribed in Column 3 of the table was nil, and the articles specified In Column 2 included the relevant jute specialities exported by the petitioner whose f. a. s. value was not less than Rs. 3,500 per tonne.

( 4 ) THE petitioner's jute specialities were, therefore, exempted from payment of Customs duty so long as their value was not less than Rs. 3,500 per tonne. If the value was less, the exemption under the notification did not apply, and duty was payable on those goods under Item 2 of the Second Schedule to the Tariff Act. By virtue of notifications issued under Section 12 (1) of the Foreign Exchange Regulation Act, 1947, exporters had to declare at the time of shipment the 'full export value' of the goods. It appears that in order to avoid controversies, as far as possible as to the real export value of the goods, the Central Government under a resolution published in a notification dated December 4, 1962, provided for. voluntary registration of export contracts for sale of jute goods with a committee known as the Export Contracts Registration Committee. The resolution recited that the registration scheme was purely voluntary and could be taken advantage of by shippers who wished to register their contracts, with a view to avoiding inconvenience at the time of shipping due to their contract prices being questioned. Under the said scheme an application for registration had to be made within one clear working day of the finalisation of the contract accompanied by a copy of the offer, the acceptance of the offer and the seller's copy of the export contract.

( 5 ) IN scrutinising the contracts, the Committee was to have due regard to the ruling prices at the time of contract, the normal recognised trade practices in regard to allowable variations from such prices, extensions of contracts, premiums and penalties for optional specifications, rebate and trade discounts. The Committee, if satisfied on scrutiny, that the terms of the contract were acceptable, issued a registration certificate. The resolution provided that the production of the registration certificate before the Customs authorities at the time of shipment as part of the shipping documents would ordinarily be accepted by the Customs authorities as constituting sufficient proof of the scope of contract prices and related financial Items.

( 6 ) IT may be added that the Committee consisted of the Jute Commissioner, who was to act as the Chairman, a member of the Reserve Bank of India, the Additional Collector of Customs and a Cost Accounts Officer of the office of the Jute Commissioner, Calcutta.

( 7 ) IN order to assist the said Committee in scrutinising contracts the Indian Jute Mills Association issued from time to time schedules of premia for optional specifications which It recommended for adoption by the Committee. The said premia were to be added to the current market price o

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