Case: ANIL KUMAR ANAND Vs. COMMISSIONER OF CUSTOMS (PREVENTIVE)

China, the brand Diyas had been clearly mentioned. The consignments had been cleared after physical verification. In effect, the plea was that the two brands really do not attract any intrinsic market value. 14. It is a submission that the sequential application of Rules, thus, required the valuation to be done in accordance with Rules 3 to 5, before proceeding to the subsequent Rules, and it is not a case where valuation was not possible under Rules 3 to 5. 15. As an alternative submission, it was also pleaded that even where identical or similar goods are not available, data is available, of the value of the goods in the National Import Database (NIDB) or the Department of Valuation database (DOV). 16. In a nutshell, the submission really is that the valuation was possible on the basis of import from the other two countries if the brand was to be given some significance, and in the alternative, if the plea was accepted that the brand was not of any significance, then the other imports from the U.K. of the same kind of lights could be taken into consideration. It was clarified that the endeavour was not to compare oranges and apples, but to compare apples of a particular variety with the apples of the same variety, i.e., if it was one lamp light, it was to be compared with one lamp light. In this behalf data was available. 17. We may notice there were certain other pleas advanced, including the plea of limitation, but that is not of much significance for re- determination, on account of the conclusion we are reaching hereinafter. 18. We must first take note of the fact that electrical decorative lightings, normally, are not highly branded products, exceptions apart. It does appear that even though the imports were under the brand names Diyas and mAntra, they were not trademarks of such nature as would make them an exclusive product. It also appears that there has been some mix up in the understanding of a trademark protection, as the same has been compared with patented goods. Thus, data was certainly available, which could have been utilised to obtain the pricing for imports from the U.K., of identical goods or similar goods. 19. The irony is that if the competent authority thought that these were goods where trademark was of significance, it could not simultaneously have ignored the imports under the same trademark, from different countries, where there were no related parties. Naturally, there would have to be made adjustments for the distance from which the import was made, or the size of the consignment, if applicable, as set out in Rules 3 to 5. There was really no occasion to straightaway proceed to determine the transactional value by relying on Rules 7 to 9. We have no doubt this principle of sequential application would apply, especially in view of sub-Rule (4) of Rule 3, which provides that there has to be a sequential implementation of the Rules, i.e., that Rules 3 to 5 would have to be exhausted first, and only in the eventuality of an inability to apply the Rules would the assessing authority proceed to impose Rules 7 to 9. 20. Learned counsel for the respondent did endeavour to persuade us that since there were concurrent findings, this Court ought not to interfere, given the scope of appeal before this Court under Section 130E(b) of the said Act, and referred to the judgment in Collector of Customs, Bombay v. Swastic Woollens (P) Ltd. & Others 1988 Suppl. SCC 796 , where it was observed as under: 9. ...... The decision of such a question of fact must be arrived at without ignoring the material and relevant facts and bearing in mind the correct legal principles. Judged by these yardsticks the finding of the Tribunal in this case is unassailable. We are, however, of the view that if a fact finding authority comes to a conclusion within the above parameters honestly and bona fide, the fact that another authority be it the Supreme Court or the High Court may have a different perspective of that question, in our opinion, is no ground to interfere with that finding in an appeal from such a finding. In the new scheme of things, the Tribunals have been entrusted with the authority and the jurisdiction to decide the questions involving determination of the rate of duty of excise or to the value of goods for purposes of assessment. An appeal has been provided to this Court to oversee that the subordinate tribunals act within the law. Merely because another view might be possible by a competent court of law is no ground for interference under Section 130-E of the Act though in relation to the rate of duty of customs or to the value of goods for purposes of assessment, the amplitude of appeal is unlimited. But because the jurisdiction is unlimited, there is inherent limitation imposed in such appeals. The Tribunal has not deviated from the path of correct principle and has considered all the relevant factors. If the Tribunal has acted bona fide with the natural justice by a speaking order, in our opinion, even if superior court feels that another view is possible, that is no ground for substitution of that view in exercise of power under clause (b) of Section 130-E of the Act. 21. We are, however, not persuaded by this argument because there appears to be a fundamental mistake committed in the manner of implementation of the statutory Rules. Once the statutory Rules exist and provide for sequential implementation, the assessing authority has no option but to proceed in accordance with those Rules, in that manner. We did put this squarely to learned senior counsel for the respondent, who really could not persuade us, or give a satisfactory answer as to why the concerned authority chose to ignore, in the given facts of the case, Rules 3 to 5, and did not proceed sequentially.

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]17. We may notice there were certain other pleas advanced, including the plea of limitation, but that is not of much significance for re- determination, on account of the conclusion we are reaching hereinafter18. We must first take note of the fact that electrical decorative lightings, normally, are not highly branded products, exceptions apart. It does appear that even though the imports were under the brand names Diyas and mAntra, they were not trademarks of such nature as would make them an exclusive product. It also appears that there has been some mix up in the understanding of a trademark protection, as the same has been compared with patented goods. Thus, data was certainly available, which could have been utilised to obtain the pricing for imports from the U.K., of identical goods or similar goods19. The irony is that if the competent authority thought that these were goods where trademark was of significance, it could not simultaneously have ignored the imports under the same trademark, from different countries, where there were no related parties. Naturally, there would have to be made adjustments for the distance from which the import was made, or the size of the consignment, if applicable, as set out in Rules 3 to 5. There was really no occasion to straightaway proceed to determine the transactional value by relying on Rules 7 to 9. We have no doubt this principle of sequential application would apply, especially in view of sub-Rule (4) of Rule 3, which provides that there has to be a sequential implementation of the Rules, i.e., that Rules 3 to 5 would have to be exhausted first, and only in the eventuality of an inability to apply the Rules would the assessing authority proceed to impose Rules 7 to 921. We are, however, not persuaded by this argument because there appears to be a fundamental mistake committed in the manner ofimplementation of the statutory Rules. Once the statutory Rules exist and provide for sequential implementation, the assessing authority has no option but to proceed in accordance with those Rules, in that manner. We did put this squarely to learned senior counsel for the respondent, who really could not persuade us, or give a satisfactory answer as to why the concerned authority chose to ignore, in the given facts of the case, Rules 3 to 5, and did not proceed sequentially.