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TMI Blog1998 (11) TMI 185X X X X Extracts X X X X X X X X Extracts X X X X ..... tion is whether goods agreed to be imported under a forward contract on the specified price but finally paid for on an amended basis, represents a true transaction value under Section 14 Customs Act, 1962 and Customs (Valuation) Rules. 4. Facts not disputed are as follows :- 1. The Respondent entered into a contract with Metal Distributors (U.K) Ltd. London for supply of about 500 MT of Copper Anodes of Zambia origin. The contract specifically provided that the price shall be LME grade Copper cash settlement price average over the quotation period. The QP was defined as second month following the month of arrival of vessel at Chennai Port. The goods arrived in India and were covered by Invoice No. 002783 dated 30-4-1996 and Bill of L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he course of international trade even though it is 'predetermined' and `futuristic'. However, the following essential conditions of Section 14 of Customs Act, 1962, have to be taken into consideration in accepting the forward contract price. (a) Time and place of importation in the course of International trade. (b) Price at which goods are offered for sale for delivery at the time and place of importation. The forward contract does not conform to the above, as the price at the time and pace of delivery in India is not ascertainable and it is also not the 'price' in the course of international trade, since the relevant time of import being 'futuritive'. Hence, forward contract price are not acceptable in view of the fact that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 670.00). (6) The Commissioner (Appeals) has observed that the quantum of discount allowed by reducing it form US $ 200 to US $ 100 per MT by the lower Authority is based on presumption and therefore, not correct. However, the lower authority analysed this aspect in detail in the Order-in-Original. It was stated that, to bring out a copper cathode from copper scrap, two process/stages are involved viz, anode stage and cathode stage. Since the copper anodes imported in the present case have to undergo the second stage only, the lower authority had reduced the quantum of discount from US $ 200 to US $ 100. Therefore, the learned Commissioner's findings to allow discount of US $ 200 per MT is not based on facts and may therefore be set as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... import. (iv) that Department had not led any evidence to show fraud. (v) that Department could not apply price for Grade 'A' Copper cathodes to goods imported which were Copper anodes (of less purity) and hence not identical or even similar; and (vi) that reduction of discount of US $ 200/MT to US $ 100/MTwas arbitrary and without any evidence or logical basis. 8. Therefore, the order impugned had no infirmity and Revenue's appeal was required to be rejected. 9. We have carefully considered the arguments on both sides and the records of the case and find as under : (i) the respondents were forced to re-negotiate the original contract as the Custom House did not accept the system of Forward contract and t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at Chennai Port, this by itself does not ipso facto lead us to the conclusion that the said re-negotiated price is either suppressed and irrelevant, particularly because no evidence to show such fraud is forthcoming on record; (viii) that there is no breach of contract, because the buyer and seller had agreed to the re-negotiated terms. Thus there is an amendment to the contract, but not a breach; (ix) that the only reason given by original authority for reducing the discount of US $ 200/MT to US $ 100/MT was that from copper scrap, the anode stage had been reached. Since the contract was not for copper scrap, but for copper anodes, this reason does not hold good. The lower authority admittedly had not noticed any contemporaneou ..... X X X X Extracts X X X X X X X X Extracts X X X X
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