9911796707
TMI Blog1991 (3) TMI 229X X X X Extracts X X X X X X X X Extracts X X X X ..... ctively. It is also proposed to confiscate the goods under Section 111(d) of the Customs Act, 1962. The proceedings were initiated on the basis of Hungarian manufacturers' price list No. 830228 issued in 1983. On receipt of the reply the Collector accepted the invoice price of the bearings and dropped the proceedings against which the appeal is filed. 3. The Collector accepted the invoice price on the following grounds: a) The invoice price is based on the price list No. 840216 dated 16th February, 1984 published by the manufacturers and attested by Second Secretary, Embassy of India, Budapest on 6th March, 1987. The said price list i.e. No. 840216 was certified to be in force by the manufacturers by their letter No. 21/637/87 dated 4th March, 1987. M/s. Metal Impex wrote a letter No. 41/617/1904 requesting the Embassy of Hungarian Peoples Republic in New Delhi to send the price list No. 840216 dated 16th February, 1984 to the Collector for 1984 shipment to India. He also found that no price list was issued in 1983 bearing No. 830228. He also found that after 1981 they published price list only in 1984. 4. He accepted the invoice price list as suppliers were Government ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing. A show cause notice was issued proposing to enhance the value and confiscate the goods under Section III(d) of the Customs Act, 1962. On receipt of the reply, the Collector accepted the invoice price rejecting the appellants' contention against which the present appeal is filed. 9. The Collector in support of his order in addition to the reasons mentioned in paragraphs 4 & 5 (supra) gave the following reasons. The deptt. has not been able to cite a single import of F.L.T. make bearings of polish origin indicating higher prices. The deptt. while adopting the price list of 1979 and reducing it by 25% presumed that the prices of 1979 continued to be same even in the case of import made in 1984. He also relied on the letter No. PN/84, dated 11th April, 1984 from the consulate of Polish People Republic in Bombay addressed to the Collector of Customs, Bombay, signed by Vice counsel Sh. Keralock wherein prices of 18 types of bearings were given and also certified that their agent in Bombay have booked the said types of F.L.T. bearings of polish make at those prices. It was also mentioned that over and above those prices 10% discount was given if letter of credit exceeded US $ 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ia. Import licence bear the endorsement "Issued in 1984 Indo-Romanian Trade Plan Provision". List attached to the said import licence includes bearings of 6200 series and prices are also shown against these bearings. These prices are as per 1985 price list price. P.E.C. is a Government of India undertaking similar in character to STC. 13. He rejected the quotations and also the cost structure on the ground that the cost structure by indigenous manufacturers is not sound. He further observed the calculation given by the Ball Association is itself quite fictitious. He referred to a photocopy of Bill of Entry No. 598/75, dated 14th October, 1986 wherein Calcutta Custom House accepted the invoice prices. Holding as above the Collector accepted the invoice prices and dropped the proceedings. 14. Challenging the above orders of the Collector it is submitted by the DR that the order of the Collector is ab initio void as it is in violation of principles of natural justice. Elaborating his arguments it is submitted that Ball and Roller Bearings Association of India gave a complaint on 21st January, 1984, and, on 21st June, 1985 to the Member, Customs, stating that the respondent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unt of violation of principles of natural justice. It is also submitted by Sh. Sunder Rajan that the deptt. is entitled for a reasonable opportunity to prove their case. 15. It is next contended that the elements constituting for the purpose of charging customs duty are the price in the course of international trade where the seller and the buyers have no interest in the business of each other and the price is the sole consideration for the sale or offer for the sale. The price for bearings imported, it is submitted, have been influenced by the consideration of enabling the importers to import a larger quantity of bearings against the same import licence, in view of very restricted import policy in respect of these types of bearings during 1984 to 1985 policy. Therefore, the price, is not the sole consideration for sale or offer for sale and it cannot be said that the seller and the buyer have no interest in the business of each other. He further submitted that the price is influenced by the restricted import policy and therefore it is not the price at which the goods are ordinarily sold. The quotations seized from the premises of M/s. Amit Sales Corpn. indicate higher prices ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sales Corpn. which are as follows: Type DM DM 1 = Rs. 4.10 Rs. Appx. Prices to India in 1984 (Rs.) 6200-ZZ 1.64 6.72 2.02 6201-ZZ 1.72 7.05 2.15 6201-2RS 2.04 8.36 2.42 6202-2RS 2.53 10.37 2.66 6203-ZZ 2.14 8.77 2.55 6204-2RS 2.80 11.48 5.43 6206-2RS 4.19 17.20 4.17 6208-2RS 6.62 27.15 8.04 6300-ZZ 2.14 8.75 - 6305-ZZ 3.89 15.95 4.03 6306-2RS 6.10 25.00 5.89 6308-ZZ 9.10 37.30 10.16 17.2. He submitted that the above chart indicated the price much higher than the prices indicated in the 1984 price list and even higher than the prices indicated in 1982 price-list. He relied on the prices of certain ball bearings of Romanian origin procured by the President of Ball & Roller Bearings Manufacturers of India indicating Romanian export price for 1985 to West Germany, U.K., and Singapore. Symbol Price in DM Rs. Price to India 1984 CIF (Rs.) 1983 1982 West Germany 6207 2.54 10.41 5.86 3.51 10.41 6208 3.12 12.79 6.72 4.03 11.96 6307 3.73 15.29 7.15 4.38 13.00 6 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submitted that under Section 14(1) where duty is chargeable with reference to their value, the value of such goods shall be the 'price', therefore, Section 14 speaks of the price and not the value. It is next contended that Section 14 says that the price at which such or like goods are ordinarily sold or offered for sale for delivery at the time and place of importation. The place of importation being India the prices quoted to other countries are irrelevant. Therefore, the quotations to U.K., West Germany and Singapore are not relevant for the purpose of determining assessable value of Indian imports. Further, he submitted that in the absence of contemporaneous imports of the same kind and quality of the bearings, it is settled by a cantena of authorities that the invoice price should be accepted and it should alone be the basis for determining the assessable value. The appellants failed to produce in any evidence of contemporaneous imports of higher prices. In the absence of contemporaneous imports the allegation of under valuation stands disproved. The various price lists to various other countries relied on are mere quotations. Quotations cannot be the basis for determining the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the show cause notice. Therefore, the Tribunal is competent to impose the penalty and requested that the Collector should be directed to determine the quantum of penalty. 25. Taking up the first contention of the appellants that they were not given opportunity to explain, and therefore, the order is ab initio void, we are of the view that the contention is opposed to the scheme of the Act. Section 122 read with Section 124 of the Customs Act does not provide for giving an opportunity to the deptt. in adjudication proceedings. The order relied upon by Shri Sunder Rajan reported in CC Bombay v. Walker Anjaria & Sons (P) Ltd. is not relevant to the facts of the instant case. Briefly the facts in the said case are, against the order of the Collector appeal was filed by the Revenue before the Tribunal. In the appeal the respondents filed a paper book to which the appellants objected on the ground that the paper book contained 23 documents which did not form part of the proceedings before the adjudicating authority. Challenging the contention of the DR an affidavit was filed by the respondents stating that the Collector who was to dispose of two cases, one relating to Jam Nagar E ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctual imports in pursuance of the said quotations. He also observed that the quotation by M/s. Techno Import & Export, Romania is not relevant as it is an offer to third party country. Therefore, the contention that the appellants were not given any opportunity to substantiate their case is without any basis. We reject the same. 26. The main contention of the appellants is that the Collector erred in accepting the invoice price as the same is grossly undervalued. 27. Before examining the contention raised by the appellants it is necessary to refer to the relevant provisions of the Act, 1962 (hereinafter called as the Act). The relevant portion of Section 14 of the Act reads as follows:- 14. Valuation of goods for purposes of assessment.- (1) For the purposes of the [Customs Tariff Act, 1975 (51 of 1975)] or any other law for the time being in force where under a duty of customs is chargeable on any goods by reference to their value, the value of such goods shall be deemed to be - (a) the price at which such or like goods are ordinarily sold, or offered for sale, for delivery at the time and place of importation or exportation, as the case may be in the course of inte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urshotum & Co. for various bearings of East European countries with their letter No. EXP/SCHE dated 25-1-1984, wherein the bearings of Polish origin are offered for higher price. (3) In the case of imports from Romania a telex quotation offer during 1984 and 1985 made by M/s. Techno Import and Export, Romania to a party in Singapore, U.K. and West Germany indicating higher prices for the ball bearings. 30. Admittedly, these are only quotations and offers. A quotation at a higher rate would not by itself show underinvoicing of the goods sought to be imported. For many reasons quotation may disclose higher rate. It is only after the quotations are accepted and contract is concluded and actual sale takes place, the price may then indicate whether there is a case of underinvoicing [Ghanshyam Chejra v. CC - 1989 (44) E.L.T. 202]. Therefore, these instances of quotation relied on by the appellants would not lead to the inference of underinvoicing in the absence of evidence, that these quotations resulted in concluded contract and goods were actually imported in pursuance of the same. The appellants failed to adduce any evidence to prove that in pursuance of these quotations the par ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ortation of goods at the quoted prices has been shown to have taken place from U.S.A. at any port of India. Although proving a case of undervaluation is difficult as the evidence produced by the deptt. is not sufficient to pin down serious charge like undervaluation against the appellants. Accordingly, goods have to be assessed to duty on the basis of value declared in the Bill of Entry for want of any proof of undervaluation therein." 34. The next contention that the prices of bearings, imported have been influenced by the consideration of enabling the importers to import a larger quantity of bearings against the same import licence in view of restricted import policy, and therefore, the seller and buyers are interested in the business of each other, and secondly the price is not the sole consideration is equally devoid of any merit. It is for the seller to decide at what price he should sell his goods taking into consideration various aspects of the business. If there is more demand and more supply, naturally the price will be reduced. It may be that the supplier is interested in selling more and the purchaser is interested in purchasing more and this fact alone does not le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cause notice relate to ball bearings number 6305 to 6310, 30203, 30204, 3211, 32213, 30309, 6207, 6208, 6307, 6308, 6204 whereas the ball bearings imported now are bearings Nos. 6215 K, 6213, 6214, 6302 under bill of entry No. 1254/112, bill of entry No. 1254/82, bill of entry No. 1254/104. Therefore, the prices quoted by the Ball bearing Manufacturers Association relying on cost of material and the quotations to West Germany, U.K. and Singapore are not relevant as they do not relate to the ball bearings number imported. Similarly, the telex message to Amit Sales Corpn. does not relate to ball bearings number imported from Romania. 36. Taking up the imports from Poland the proposal in the show cause notice is that in 1979 the prices list was issued and again in 1982 price list was issued. In 1982 price list were lower than the prices mentioned in 1979, and therefore, the price in 1979 should be reduced by 25% as 1982 price list is not applicable for the imports made in 1984. On the face of it the approach of the appellants is most unreasonable and irrational. The appellants admit that there is a decline in the price from 1979 to 1982 instead of taking the price of 1982 which ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
