The Central Government's determination of the rate of exchange under Section 14(3)(i) of the Customs Act is not arbitrary and is applicable to all imported goods, not just to a particular item or person.

A.L.Bahri, J.

1. The question involves in this writ petition relates to charging of Customs Duty on import as well as fixing valuation of the imported articles for the purposes of imposition of customs duty. The petitioner-firm imported about 2000 M.T. acrylonitrile from M/s. B.P. Chemicals, U.S.A. The import was made under the import policy which provided payment of the price in U.S. Dollars after purchasing Exim Scrips. Persons who earlier exported goods were granted Exim Scrips, allowing them import of certain goods. Under the policy decision, the petitioner could purchase such Exim Scrips for making payment of imported material. According to the case of the petitioner when he purchased Exim-scrips, he purchased the same at the rate which was higher than otherwise prevalent. However, when the goods arrived in the Indian Port on April 29, 1992, the Customs officials wanted to fix value of the goods imported by applying different rate of exchange as determined by the Central Government under Section 14(3)(i) of the Customs Act. Since there was difference in the exchange rate, the petitioner was made to suffer enormously. The allegation of the petitioner is that under the Import Policy, the Central Government had promised and allowed the petitioner to import goods and such promise would be fulfilled only when the petitioner received goods by applying same rate of exchange. On notice of motion having been issued, written statement has been filed by the respondents controverting the allegations of the petitioner inter alia asserting that the Central Government issued Notification No. 25/92-Cus.(NT) dated March 27,1992 fixing the conversion rates. When the goods were received at the port on April 29,1992, the aforesaid notification was prevalent and the value of the imported goods was to be determined as per such rates and the customs duty to be charged under Section 3 read with Section 14 of the Customs Act accordingly.

2. Shri R.S. Mittal, Senior Advocate appearing on behalf of the petitioner has argued that different valuation for the imported goods could not be determined by the Customs Authorities for the purposes of charging customs duty. The value has to be fixed as was paid by the petitioner to the foreign sellers. In order to appreciate this argument, brief reference of the provision of the Act is necessary. Section 14 of the Customs Act reads as under :-

(1) For the purposes of the Customs Tariff Act, 1975 (51 of 1975) or any other law for the time being in force whereunder a duty of customs is chargeable on any goods by reference to their value, the value of such goods shall be deemed to be the price at which such or like goods are ordinarily sold, or offered for sale, for delivery at the time and place of importation or exportation, as the case may be, in the course of international trade, where the seller and the buyer have no interest in the business of each other and the price is the sole consideration for the sale or offer for sale : Provided that such price shall be calculated with reference to the rate of exchange as in force on the date on which a bill of entry is presented under Section 46, or a shipping bill or bill of export, as the case may be, is presented under Section 50. (1A) Subject to the provisions of Sub-section (1), the price referred to in that sub-section in respect of imported goods shall be determined in accordance with the rules made in this behalf.

(2) Notwithstanding anything contained in Sub-section (1) [or Sub-section (1A)], if the Central Government is satisfied that it is necessary or . expedient so to do it may, by notification in the official Gazette, fix tariff values for any class of imported goods or export goods, having regard to the trend of value of such or like goods, and where any such tariff values are fixed, the duty shall be chargeable with reference to such tariff value.

(3) For the purposes of this section - (a) "rate of exchange" means the rate of exchange - (i) d