Principles clarified relating to approach to be adopted for determination of normal price and determination of applicability of R. 6(b)(i) or (ii) of the 1975 Rules. Held, Having considered the records and the submissions of the parties, this Court is of the opinion that the impugned order cannot be faulted. This Court in its judgment reported as ‘A.K. Roy Vs. Voltas Limited1’ held as follows: “…On the question whether the appellant was bound to pay customs duty on the basis of clause (a) or clause (b) of Section 30 of the Sea Customs Act, 1878, the Privy Council held that since the sales were to customers direct, the real value of the goods cannot be ascertained under clause (a) of Section 30 and that clause (b) of Section 30 was applicable. Their Lordships said that in determining the price which is to represent the real value of the goods to be ‘taxed, “the price must be conservative in every respect and free in particular from any loading for any post- importation charges incurred in relation to the goods”.
“The price is to be a price for goods. as they are both at the ‘time’ and ‘place’ of importation. It is to be a ‘cash price’, that is to say a price free from any augmentation for credit or other advantage allowed to a buyer; it is to be a net price, that is to say it is a price ‘less trade discount’ “.
Their Lordships, therefore, held that the words the ‘wholesale price’ were used in the section in contradistinction to a ‘retail price’, and that not only on the round that such is a well-recognised meaning of the words but because their association with the words ‘trade discount’ indicates that sales to the trade are those in contemplation, and also because only by attaching that meaning to the word is the ‘wholesale price’ relieved of the loading representing post- importation expenses which, as a matter of business, must always be charged to the consumer, and which are eliminated.” Para 7. In view of the clear principle enunciated by this Court which is that the most conservative price is to be taken into account while determining the value of goods, CESTAT approach and conclusions, in the opinion of this Court cannot be faulted. The impugned order of the CESTAT is accordingly affirmed. Para 9
[CCE v. J.R. Organics Ltd., (2023) 4 SCC 779]