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TMI Blog1988 (2) TMI 265X X X X Extracts X X X X X X X X Extracts X X X X ..... , in addition, imposed a penalty of Rs. 50,000/- on the appellants under Section 112 of the Customs Act, 1962. Further, the Additional Collector held that the declared c.i.f. value of the goods (Rs. 87,576/-) was too low and that the real value, in the light of normal prices of the goods in the course of international trade, should be Rs. 2,48,013. Acting under Rule 8 (Best judgment assessment) of the Customs Valuation Rules, 1963, read with Section 14(1)(b) of the Customs Act, 1962, he enhanced the value of the goods to this higher amount for assessment of customs duty. At the same time, the Additional Collector held that no mens rea on the part of the appellants had been established so far as the value declaration was concerned. The appellants are now in appeal against the Additional Collector's order. 2. For the reason that the goods were under detention in the docks, we have heard this matter out of turn and have carefully considered the submissions of both parties and the record. 3. To take the licence aspect first, the appellants relied on the Division Bench judgment of the Gujarat High Court at -1971 (27) STC 203 (Guj.) - Vicas Tractors v. Commissioner of Sales Tax in whic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gricultural machinery of the types specified, there are two other entries in Chapter 87 which are specific for tractors, including agricultural tractors. As per the accepted principle of classification, the specific entry for tractors must prevail over the general entry for agricultural machinery. In their application to the Licensing Authority, the appellants had shown past imports of tractors also for the servicing of which spares would be needed. But the Licensing Authority chose to give them an import licence for spares of various machineries including agricultural machinery and not for spares of tractors. Since "agricultural machinery" and "tractors" have two separate and distinct classifications in the ITC Schedule, the expression "agricultural machinery" in the import licence could not be given its common and generic meaning. Further, note 1 (k) to Section XVI of the Import Schedule to the Customs Tariff Act, 1975, which is equally applicable to the ITC Schedule by virtue of the note at the beginning of the ITC Schedule, excluded vehicles from the scope of Chapter 84 of the ITC Schedule and put them instead in Chapter 87. This also shows that tractors falling in Chapter 87 c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the particulars of the previous offences and to that extent the appellants are handicapped in countering the Addl. Collector's conclusion. If the Addl. Collector had in view the two importations made in August and early September, 1986 against the same licence, the said importations were just a few weeks or days earlier than the present one and by that time it was too late for the appellants to have stopped the present consignment from coming in. Considering all circumstances, while we agree that the import licence produced was not valid to cover the goods, we feel that some leniency is merited in the quantum of punishment. Accordingly, we set aside the penalty in full and reduce the amount of redemption fine to Rs. 1 lakh (Rupees one lakh only). 6. To take the value aspect now, the table below will show the values declared and those assessed by the Addl. Collector:- S.No. Description of the goods Pricing Unit Declared price Assessed price Date of the other invoice relied on by the Addl. Collector (1) (2) (3) (4) (5) (6) Pound Pound 1. Piston Rings MF 135 A set of 3 1.00 5.13 (1.71 x 3) 30-12-1984 2. Crankshaft Assembly Each ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... department had no evidence of comparable value. The Addl. Collector has increased the declared price by 311.92% on the ground that the average level of under-invoicing by the appellants in regard to the other goods was of that order. The table given above would show that the price assessed ranged from double to about 5 times. In the circumstances, it is difficult to say, in the absence of any documentary evidence, whether the price increase for B 3530 H should be double or more than double. We cannot justify the average loading of 311.92%. We order, therefore, that the declared invoice rate of 2.20 pounds for B 3530 H should be accepted. 9. The remaining invoices and confirmation orders relied on by the Addl. Collector pertain to 1985 and late 1984, except in the case of one invoice of 4-4-1986 for bush B 709. Normally, we would not take the prices prevalent in late 1984 and in 1985 as a basis for comparison with the prices of mid-1986. But there are four good reasons in the present case for which we feel that even slightly older prices are not entirely irrelevant. First, the comparison as between late 1984 prices and 1985 prices shows that the prices were almost steady during thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w, the prices could not have fallen so low in mid-1986 as claimed to be by the appellants. 10. The appellants then pleaded that they had purchased the goods out of a stock lot and hence the prices were low. They stated that M/s. Vandervell, U.K., the manufacturer, sold the stock lot to a dealer in Cyprus. The Cyprus dealer re-sold the goods to a third party back in U.K., M/s. AMC Exports, London. The appellants, in turn, purchased the goods from M/s. AMC Exports, London. The Addl. Collector did not question their contention that the goods were out of a stock lot. Even so, the stock lot sale was a one-shot affair and so long as the goods were identical in all respects with those normally manufactured and traded, and the goods had not become obsolete and their further manufacture not dis-continued, the stock lot prices could not be considered as the prices ordinarily charged in the course of international trade. The reliance of the learned representative of the department on the Bombay High Court judgment -1987 (31) E.LT 356 (Bom.) - Satellite Engineering Limited and Another v. U.O.I. was well taken. In paragraph 20 of this judgment the Bombay High Court had held that "a clearance o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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