WIPRO LTD. versus ASSISTANT COLLECTOR OF CUSTOMS & ORS.

WIPRO LTD. versus ASSISTANT COLLECTOR OF CUSTOMS & ORS.

The proviso (ii) to Rule 9(2), which mandates adding 1% of FOB value for loading, unloading and handling charges regardless of actual costs, is arbitrary, irrational, ultra vires Section 14 of the Customs Act, and violative of Article 14. The rule must be read down to apply only when actual charges cannot be ascertained.

Parties
Appellant: WIPRO LTD.; Respondents: ASSISTANT COLLECTOR OF CUSTOMS & ORS.
Jurisdiction
India
Judgment Date
16 April 2015
Procedural Posture
Civil Appeal / Final Judgment on Appeals From High Court Ruling
Outcome
Appeals allowed; impugned High Court judgment set aside.
Legal Topics
Ultra Vires, Delegated Legislation, Customs Valuation, Arbitrariness, Reasonableness, Article 14, Rule Making Power
Constitutional Law Customs Law Ultra Vires Delegated Legislation Customs Valuation Arbitrariness Reasonableness Article 14 +1 more

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Parties

WIPRO LTD.

Appellant

ASSISTANT COLLECTOR OF CUSTOMS & ORS.

Respondents

Procedural Posture

Civil Appeal / Final Judgment on Appeals From High Court Ruling

Legal Issues

  1. 1 Constitutional validity of proviso (ii) to Rule 9(2) of Customs Valuation (Determination of Price of Imported Goods) Rules, 1988
  2. 2 Whether authorities can add 1% of FOB value for handling charges even when actual charges are available and ascertainable
  3. 3 Whether the impugned provision is arbitrary, irrational, ultra vires Section 14 of Customs Act, 1962 and violates Article 14

Ratio Decidendi

The proviso (ii) to Rule 9(2), which mandates adding 1% of FOB value for loading, unloading and handling charges regardless of actual costs, is arbitrary, irrational, ultra vires Section 14 of the Customs Act, and violative of Article 14. The rule must be read down to apply only when actual charges cannot be ascertained.

Court Disposition

Appeals allowed; impugned High Court judgment set aside.

Orders

  • Proviso (ii) to Rule 9(2) of Customs Valuation Rules, 1988, as amended by Notification No.39/90 dated 05.07.1990, is read down to apply only if actual handling charges are not ascertainable.
  • The notional addition of 1% of FOB value for handling charges is arbitrary and unsustainable when actual charges are known.