Law: Customs Act, 1969

Section: 25(2)(d)(e),32

Law: Customs Rules, 2001

Section: R.113,113(3)(4)

Customs Act (IV of 1969)--- ----Ss. 25(2)(d)(e) & 32---Customs Rules, 2001, R.113---Failure to include amounts of licence fees and running royalty in the customs value of imports---Contravention case was registered against companies on allegation that the companies had not included the amount of licence fees and running royalty in the customs value of imports---Alleged short paid amounts were adjudged as payable besides penalties were imposed on the companies---Validity---Provisions of S.25(2)(d) & (e) of Customs Act, 1969, read with R. 113(3)(4) of the Customs Rules, 2001, were unequivocal and unambiguous in so far as they necessitated inclusion of royalty in the transaction value of the imported goods, either directly or indirectly; and also inter alia included value of any part of the proceeds of any subsequent resale disposal; or use of imported goods that accrued directly or indirectly to the foreign seller---Other assemblers, were including the royalty and technical fee amounts in declared customs value and were paying customs duty and other taxes accordingly---Plea raised by the companies that their cases were not covered within the ambit of mischief of misdeclaration as incorporated in S.32(2) of the Customs Act, 1969, and were hit by provisions of subsection (3) of S.32, was legally untenable and not justified---Companies had from the very outset acted with mala fides through concealment and exclusion of fees and royalty in customs declaration by resorting to insertion of tailor-made clauses into their agreement---Such was undoubtedly a deliberate, advertent, intentional and wilful act on the part of the companies---Charge of mis-declaration under relevant clauses of Customs Act, 1969 by the Customs Authorities, was appropriate and within four corners of law---Customs Officers recovered amount in question under a legislature mandate---Royalty and technical fee as included for customs value, were fully covered under S.25(2)(d)(e) of the Customs Act, 1969---Duty and taxes as correctly payable were to be ascertained---Consistency and uniformity were the touchstone of revenue laws and were to be strictly followed by the Tax Authorities---Royalty…

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