M/s. Shrine Premium Stiches imported 10 automated looms from Germany for a price of US $ 70,000. The price was settled and machines were shipped on…

(c) M/s. Shrine Premium Stiches imported 10 automated looms from Germany for a price of US $ 70,000. The price was settled and machines were shipped on 20th March. Meanwhile, the importer made further negotiations with the exporter for reduction of price of looms based on the leads given by them so far and also in future. Due to this negotiation, the exporter further reduced the price of 10 automated looms to US $ 60,000 and confirmed the same by email dated 30th March. However, consignment arrived in India on 29th March. Proper officer of customs ignored the revised price confirmed by email and assessed the value based on original price of US $ 70,000. This was contested by the importer as unfair action by the Department. Importer seeks your advice on the correctness of action of the proper officer. Give reason in support of your answer. As per section 14 of the Customs Act, 1962, the value of the imported goods is the transaction value, which means the price actually paid or payable for the goods at the time and place of importation. Further, the Supreme Court in case of Garden Silk Mills v. UOI 1999 (113) E.L.T. 358 has held that importation gets complete only when the goods become part of mass of goods within the country. Since in the instant case, the price of the goods was reduced after the goods arrived in India, the price would be considered to be revised after the importation took place. Hence, the goods should be valued as per the original price of US $ 70,000, which was the price payable at the time of importation. The action taken by the proper officer is valid.