TMI Blog1991 (9) TMI 172X X X X Extracts X X X X X X X X Extracts X X X X ..... icated the price of the aforesaid model at Jap. Yen 2,60,000 per set FOB. It was also alleged that the said price list did not provide any discount schedule with reference to quantity but showed a discount schedule for the distributors. The appellants thereafter submitted distributorship certificate from the supplier which showed that the appellants are the distributors in India of the suppliers. The declared price at Jap. Yen 1,20,000 is even lower than the 40% discount price offered to distributors only, as the discounted price taking into account the 40% discount comes to Jap. Yen 1,56,000/- per set FOB. It was, therefore, alleged that the aforesaid circumstances indicated that the relationship between the appellants and the supplier has influenced the price to a great extent. 1.2 A further evidence in support of the proposed price of Jap. Yen 2,60,000 was mentioned by the department in the show cause notice in the shape of two bills of entry with the relative invoices in the names of (i) Principal, L.E. College, Morbi and (ii) Gujarat Narmada Valley Fertilizers Co. Ltd. Both the aforesaid invoices under which the actual import was taken place indicated the price of an Analy ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsible for maintenance and technical service necessary for the suppliers offered equipment. The certificate was valid until Sept. 2, 1991. 2.1 Learned Advocate has further submitted that the invoices relied upon by the department for taking the price at Jap. Yen 2,60,000 is not tenable because that price is for one set only whereas the appellants have admittedly imported 24 sets. The learned Advocate has also relied upon two invoices, namely (i) dated 14th June, 1990 in the name of Ganjan Surgical and Scientific Company, Bombay and (ii) dated Nov. 22, 1990 in the name of M/s. S.J. Corporation which indicate that imports of 10 sets have been made by the aforesaid two parties of the aforesaid goods at the rate of Jap. Yen 1,43,000 FOB per set. The learned Advocate has thus submitted that the prices for import of 24 sets declared by the appellants is very much comparable to the prices of goods actually imported by the other importers. On a query from the Bench, the learned Advocate has fairly conceded that these two invoices were not before the lower adjudicating authority but he has submitted that these could not be produced before the said authority because they came into hands of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ubmits that the Tribunal has observed in 1989 (40) E.L.T. 207 (Para 4) [Metal and Alloys Industries v. CC] that the quantity discount normally ranges from 5 to 10%. He submits that a quantity discount of more than 40%, as is the case here, is a.sheer make-believe and should not be accepted. 3.2. As regards the two invoices produced now before the Tribunal and relied upon by the appellants, the learned DR submits that these invoices do not indicate whether these prices were accepted by Customs; these invoices are not supported by any corresponding bill of entry. Therefore, these invoices cannot be relied upon in view of the incomplete information they give. In his support for this proposition, he relies upon Tribunal s judgment reported in 1988 (37) E.L.T. 118 (Tri.) = 1988 (12) ETR 112 (Para 5) [Aarkeyess Imports Corpn., N. Delhi v. C.C.N. Delhi]. 3.3 As regards the learned Advocate s reliance on Glaxo Laboratories - 1985 (21) E.L.T. 72 (Bom.) case for non-enhancement of value for the purpose of debit of an ITC licence, learned DR has submitted that the Glaxo s case should be confined to its peculiar facts. No principle of law can be drawn therefrom, as has been held by the Tri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing transaction value of identical goods under Rule 5 would apply only if the transaction value cannot be determined in terms of Rule 3(1), as is clear from sub-rule 2(i) of Rule 3. Nevertheless, we may observe here that apart from we have said above, application of Rule 5 in the facts and circumstances of this case is also incorrect on the ground that the department is comparing the value not of the identical goods with the goods in question under import here. Identical goods in terms of Rule 2(1)(c) has been defined in a particular manner and that definition would be applicable for the purpose of application of Rule 5. The identical goods in terms of the said definition means, inter alia, imported goods which are same in all respects ..........except for minor differences in appearance which do not affect the value of the goods. It has been rightly pointed out by the learned Advocate for the appellants that the adjudicating authority s reliance on two invoices in the names of Principal, L.E. College, Morbi and Gujarat Narmada Valley Fertilizers Co. Ltd. is not tenable inasmuch as the goods imported in those cases were only one set unlike 24 sets in the present case. Further ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upplier on the listed price if there is a big order. Having regard to the number of sets ordered by the supplier, the discount given by the supplier does not seem to be unreasonable. In any case there is no evidence from the side of the department about the unreasonableness or non-genuineness of the discount in this case. Accordingly, we are of the view that there is no case of undervaluation, as alleged by the department. 5. The issue of enhancement of value for the purpose of debiting the licence is only of academic interest after our finding that transaction value cannot be discarded and therefore, we feel that it is unnecessary to go into this issue. 6. In view of our discussion above, the appeal is allowed with consequential relief to the appellants. 7. [Assent per : S.V. Maruthi, Member (J)]. -I agree with ld. Brother Shri P.C. Jain, Member (T) that the Department has failed to establish that the appellants and the suppliers are related persons. 8. As regards accepting the transaction value of the goods, I agree with him for reasons recorded below. The Collector rejected the transaction value relying on two invoices, namely; invoice under which the Principal, L.E. Col ..... X X X X Extracts X X X X X X X X Extracts X X X X
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