AIR 1992 SUPREME COURT 705 ::1992 AIR SCW 342 ::(1991) 55 ELT 5 ::(1991) 36 ECC 7 ::(1991) 36 ECR 161 ::1991 (4) SCC 357 ::1991 CriLR(SC MAH GUJ) 641 ::1992 (1) Bom CR 461 ::(1991) 3 SCR 513 (SC) ::1991 (3) SCR 513 ::(1991) 3 JT 401 (SC) ::1991 (3) JT 401

Supreme Court Of India

Hon'ble Judge(s): S. Ranganathan, M. Fathima Beevi, N. D. Ojha , JJJ

Customs Act (52 of 1962) , S.22, S.27— Customs duty - Abatement - Clearance of goods from customs - Subsequent detention of defects in goods - Seller agreeing to pay compensation to buyer - Claim for abatement of duty under S.22 or of refund under S.27 on that ground - Cannot be entertained. Where the importer of the goods detected the defects in the goods after the clearance from customs and the foreign supplier of the goods i.e., the seller accepted the defects and damages and agreed for payment of compensation, no claim of the importer for abatement of customs duty under S.22 or claim for refund under S.27 could be legitimately entertained on the ground that goods supplied were not in accordance with the contractual specification and the defects being inherent in nature resulted in diminution in the real value of goods and what had been agreed upon by the foreign seller was reduction in price on account of these defects. The importer on finding the goods cleared and distributed not to his entire satisfaction may have a claim in contract, against the seller for providing sub-standard, damaged or deteriorated goods for the value in the invoice, and it may be open to the buyer to realise from the seller such damages as he would in law be entitled to. That claim for damages cannot have any bearing to the assessment at the time of the clearance. The price a....