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examine the arguments advanced by Mr. Agarwal, Senior Counsel for the appel-
lant and Mr. Bagaria, Senior Counsel for the assessee, we shall advert to the stat-
utory provisions which are applicable in the facts of this case. These are Sections
12, 14 (as it stood at the time of importation) of the Customs Act, Rules 4 and 9 of
the 1988 Rules. These provisions stipulate : -
Sections 12 and 14 of the Customs Act 1962
“12. Dutiable goods. — (1) Except as otherwise provided in this Act, or
any other law for the time being in force, duties of customs shall be levied
at such rates as may be specified under [the Customs Tariff Act, 1975 (51 of
1975)], or any other law for the time being in force, on goods imported into,
or exported from, India.
(2) The provisions of sub-section (1) shall apply in respect of all goods be-
longing to Government as they apply in respect of goods not belonging to
Government.
14. Valuation of goods for purposes of assessment. — (1) For the pur-
poses 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 —
(a) the seller and the buyer have no interest in the business of
each other; or
(b) one of them has no interest in the business of the 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 ex-
change 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 present-
ed 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 ac-
cordance with the rules made in this behalf.
(2) Notwithstanding anything contained in sub-section (1) or sub-section
(1A) if the Board 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) determined by the Board, or
(ii) ascertained in such manner as the Board may direct,
for the conversion of Indian currency into foreign currency or
foreign currency into Indian currency;
(b) “foreign currency” and “Indian currency” have the meanings
respectively assigned to them in clause (m) and clause (q) of
section 2 of the Foreign Exchange Management Act, 1999 (42
of 1999).”
Rule 4 and Rule 9 of the 1988 Rules
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