Content Provider | Supreme Court of India |
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e-ISSN | 30484839 |
Language | English |
Access Restriction | NDLI |
Subject Keyword | Customs Tariff Act 1962 |
Content Type | Text |
Resource Type | Law Judgement |
Jurisdiction | India |
Case Type | Appeal |
Court | Supreme Court of India |
Disposal Nature | Appeal Allowed |
Headnote | Customs Tariff Act, 1962 - Tariff Heading 64.04 - Customs duty, evasion of - Company PIL importing synthetic shoe uppers and Company PIND importing soles, insoles and sock liners as components/parts - Department's case that PIL owner of PIND and items imported constituted synthetic shoes in semi knocked down form, thus, duty evaded - Correctness of - Held: PIL carried out the entire manufacturing activity of finished products-synthetic shoes for domestic and export markets and was the real importer of all the items, thus Department rightly clubbed the items - Items imported constituted complete shoe in SKD condition, thus, to be assessed as complete finished goods under Tariff Heading 64.04 and exemption under Notification not applicable - Bifurcation by importation of items by two companies was subterfuge to evade duty, thus, para 156(A) violated - Hence, importers liable to pay customs duty at 50% plus CVD at 15% ad valorem - However, issue regarding re-quantification of differential duty, redemption fine and penalties payable by importer remitted back - Exim Policy 1992-97 - Para 156(A) - Notification No. 45/94 Cus dated 1.3.94 - Customs Act, 1962.M/s. PIL imported synthetic shoe uppers and M/s. PIND imported soles and insoles as components/parts. Appellant-Department found that the two companies evaded customs duty. It issued show cause notices to the respondents-two companies alleging that M/s. PIL were the owners of M/s. PIND; that M/s. PIND was a dummy unit of M/s. PIL; that the goods imported were not parts/components but were semi knocked down (SKD) goods, liable to be assessed as complete finished goods under tariff Heading 6404.19 of the First Schedule of the Customs Tariff Act, 1975 and liable to basic customs duty at 50% ad valorem and countervailing duty at 15% ad valorem; that synthetic shoes were imported without specific import licence; that M/s. PIL resorted to subterfuge of importing uppers of "Reebok" shoes in their own name and the remaining three components in the name of M/s. PIND to bypass restriction imposed by para 156(A) of the EXIM Policy 1992-97 and claim the benefit of Notification No. 45/94-Cus dated 1.3.94; that the value given in the import invoices did not represent the correct transaction value since a single consignment meant for one importer-M/s. PIL was deliberately split up into two parts and, valuation had to be done by invoking rule 8 of the Customs Valuation (Determination of Price of Imported Goods) Rules, 1988, and thus the consignment of two companies should be clubbed for the assessment under EXIM Policy 1992-97 and Customs Act, 1962. The Commissioner held that the imports made by M/s. PIND of soles, insoles and sock liners should be treated as imports by M/s. PIL, however, in view of elaborate manufacturing process of support shoes, the clubbed items did not constitute synthetic shoes in SKD condition so as to contravene para 156(A) of the EXIM Policy 1992-97; that all imports attracted duty at the rate applicable to the footwear and not at the rate applicable to components/parts; that no duty was demandable in respect of synthetic uppers, imported by M/s. PIL, however, all the components imported by M/s. PIND attracted duty at the rate applicable to fully-finished footwear, and as such the exemption under notification 45/94-Cus dated 1.3.94 was not applicable, thus the respondent was liable to pay duty. Respondent-importers filed appeals. Tribunal allowed the same. Hence the present appeals. |
Judge | Honble Mr. Justice S.H. Kapadia |
Neutral Citation | 2007 INSC 955 |
Petitioner | Commissioner Of Customs, New Delhi |
Respondent | M/s Phoenix International Ltd. & Anr. |
SCR | [2007] 10 S.C.R. 126 |
Judgement Date | 2007-09-20 |
Case Number | 8037-8047 |
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