1. Originally preferred as Revision Application before the Central Government, this case has been transferred to the Tribunal and is being treated as an appeal. This case has been heard today.
(i) The appellants had paid the freight amount in Indian rupees but the Custom House took a different method to arrive at the freight element for inclusion in the assessable value. It converted the freight amount shown in the invoice in foreign currency to Indian rupees. Due to this conversion of the freight from foreign currency to Indian rupees, the appellant had to pay a higher amount by way of Customs duty.
(ii) In computing the assessable value, the Customs House added the landing charges which is not warranted under the provisions of Section 1" of the Customs Act, 1962.
3. With regard to the first ground, Shri Ignatius explained that in the present case the goods had been imported by an Indian flag vessel and the payment towards freight was also paid in Indian currency. However, the freight amount was shown in the invoice both in terms of the foreign currency (American dollars) of the country from which the goods have been consigned as well as in Indian Rupees. This arrangement for showing the freight amount in the foreign currency as well as in Indian currency at a pre-determined foreign exchange conversion rate was the result of an agreement between the Government of India and the I.D.A.(International Development Association). It was the contention of Shri Ignatius that since the freight had been paid in. Indian rupees the Customs authorities had no justification to add in the, assessable value freight expressed in US' dollars which resulted in a higher amount because "of the "difference in the rate of exchange between the US dollars and the Indian rupees as given in the invoice and as adopted by the Custom House respectively, as per some departmental instructions. He therefore pleaded that the excess duty levied on this ground was refundable to the appellants.
4. Regarding the second ground, viz. the inclusion of the landing charges in the assessable value, Shri Ignatius stated that he had.
dwelt at length on this point while arguing the Appeal No. 141/80-A preferred by the same appellants as in the present case.
5. Shri Nair stated that, with regard to ground (i) argued by Shri Ignatius, the action of the Custom House was strictly in accordance with the law. According to Section 15(3)(a) [now proviso to Section 14(1)(a)] of the Customs Act, 1962, the value for levy of Customs duty is to be worked out adopting the rate of exchange as in force on the date on which a bill of entry is presented under Section 46 of the Act.
This being the legal position, it did not make any difference that the appellant had paid the freight in Indian rupees. For the purposes of determining value under Section 14 of the Act, any special arrangement entered into between the Government of India and any international financial institution was not relevant unless, of course, a statutory provision to this effect was provided for. -This was not the case here.
6. With regard to the addition of landing charges, Shri Nair stated that he had countered the arguments advanced by Shri Ignatius when the latter had argued the legality and propriety of such charges in connection with the appellants' Appeal No. 141/80-A. He, therefore, pleaded that the appellants have no case for relief on both the grounds.
7. We have heard both the parties and given careful consideration to the Submissions made by Shri Ignatius and Shri Nair. The Customs Act had its own in-built provisions with regard to fixation of assessable value of imported goods. Freight is one of the constituents which goes into the computation of the assessable value. At the relevant time provisions of Section 15(3)(a) of the Act stipulated how the value of the imported goods was to be converted from foreign currency into Indian rupees. The rates for conversion of important foreign currencies are notified by the Central Government from time to time under a statutory provision (Section 15 at the relevant time; Section 14 at present). The appellants have not disputed the fact that the rate of exchange for conversion of dollars into rupees adopted by the Custom House in their case was different from that notified by the Government.
Their contention is that they had paid the freight amount in Indian rupees and that amount alone could be added to the. assessable value of the goods. In the face of a clear legal position in this behalf, we see no merit in this contention of the appellants. We also agree with Shri Nair that any special agreement between- the Government of India and any foreign Government/financial institution (I.D.A. in the present case) cannot override the provisions of Customs Act. We have no hesitation, therefore, in upholding the finding of the Appellate Collector on this ground.
8. As regards the second ground raised by the appellant, viz., the legality of adding landing charges to the assessable value of the goods,, we have dealt with the issue at length while disposing of the appellants' other matter covered by their Appeal No. 141/80-A decided on 15-4-1983. For the reasons contained in that order, the appellants' claim on ground (ii) is also rejected.
9. For the reasons stated above, we find no merit in this appeal and dismiss the same in entirety.