TMI Blog2006 (2) TMI 331X X X X Extracts X X X X X X X X Extracts X X X X ..... . In the present case, the imports were partly made prior to introduction of Rule 10A on 19-2-98 and in the case of Adani Exports Ltd. v. CC[ 1999 (11) TMI 220 - CEGAT, MADRAS] , the Tribunal held that Rule 10A is not retrospective and cannot be applied for imports made prior to its introduction in the statute book. The appeal of the Revenue against this decision was dismissed by the Supreme Court on merits, as seen from [ 2001 (3) TMI 1029 - SC ORDER] . There is yet another reason for the non-applicability of Rule 10A to the facts of the present case. The Rule applies in cases where the proper officer has reasons to doubt the truth and accuracy of the value declared to the customs, where the Customs authorities feel that there has been manipulation in the invoices or in the value declared to Customs and involving extra remittance to the foreign supplier over and above the invoice value. That is no so in the present case as there is no dispute about the truth and accuracy of the declared value. On the plea of limitation also, we find that the appellants have a strong case. What is used against them is their declaration to Customs that they and R H are not related. This declaration ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs of the company. The show cause notice inter alia alleged that the appellants and R H are related to each other, that the agreement between the two was a sole distributor agreement, that the two are interested in the activity of each other in view of the financial transactions between them and that this relationship has influenced the price of imported Mancozeb T- 85%, that the sale between the appellants and the R H is not a sale where the buyer and seller are not interested in the business of each other and the price is the sole consideration for the same as the sale of the same product is ordinarily offered for sale by R H during the course of international trade at US $ 2.85 per kg, the price at which M/s. Indofil was importing the product from R H, that the price of Dithane M-45 sold by the appellant has systematically risen and similarly sale price of the identical products sold by M/s. Indofil ( who started manufacturing indigenously since 1996) had also systematically risen, that the appellants connived with R H to misdeclare the value of the goods. The notice invoked the provisions of Rule 5 of the Customs (Valuation) Rules, 1988. The appellants denied the allegations in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . None of the provisions of Rule 9 apply to the present case. Rule 4(2) provides for circumstances under which the transaction value between the importer and the supplier should be rejected and none of such circumstances exists in the present case. Rule 4(2) is reproduced below: - Rule 4(2) - The transaction value of imported goods under sub-rule (1) above shall be accepted: Provided that - (a) the sale is in the ordinary course of trade under fully competitive conditions; (b) the sale does not involve any abnormal discount or reduction from the ordinary competitive price; (c) the sale does not involve special discounts limited to exclusive agents; (d) objective and quantifiable data exist with regard to the adjustments required to be made, under the provisions of Rule 9, to the transaction value; (e) there are no restrictions as to the disposition or use of the goods by the buyer other than restrictions which - (i) are imposed or required by law or by the public authorities in India; or (ii) limit the geographical area in which the goods may be resold; or (iii) do not substantially affect the value of the goods; (f) the sale or price is not subject to same conditions or considerat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esale price of imported goods in India and such a method is acceptable under Rule 4 and it also conforms to the value arrived at as per Rule 7 i.e deductive value method. The correspondences exchanged (pages 105 to 108, 117 to 121) shows that R H price is worked out backward from the resale price of the goods in India for formulation products and this is the conclusive evidence that the price charged by R H from the appellant is entirely based on commercial consideration. From the resale price of formulation product in India, the price of the pesticide to be imported by the appellant has been arrived at US $ 2.04 per kg. while R H wanted to sell Mancozeb at US $ 2.2 per kg. In the statement dated 4 -11-97, Dr.Vasant L.Patil, Research Development Manager - Agro Chemicals, South Asia of R H has clearly stated that cif price was fixed by R H for Bayer India Ltd. imports based on local end-user (farmer) prices prevailing in the market for competitive products. There was another round of negotiation of price US $ 2.10 per kg was agreed to. The price was further negotiated and reduced from US $ 2.25 to US $ 2.10 per kg. based on resale price of goods in India compared with other formulat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in Kerala Electric Lamp Works v. CCE [1988 (33) E.L.T. 771] para 7 :- It is natural that all the manufacturing units, including the assessee, would, for their own enlightened self-interest, wish well of their customer s business. But that is true practically of every buyer and seller relationship since the buyer s prosperity means more business for the seller. But that does not mean that the seller has thereby acquired an interest in the business of the buyer. Interest in the business of each other, as contemplated in Section 4(4)(c), is something more definite and tangible interest in the assessee s business.... 13. In view of the above, the findings in paras 56 and 57 of the impugned order that R H and Bayer are interested in the business of each other cannot be sustained. The financial transaction referred to and relied upon in the Commissioner s order refers to 50% of the reimbursement of cost of advertisement (Rs. 30 lakhs) incurred by Bayer in the year 1996. As per interpretative Note to Rule 4(2), - If the buyer undertakes on his own account, even though by agreement with the seller, activities relating to the marketing of the imported goods, the value of these activities i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Agro Chemicals from Netherlands 1994 Rs. 63.52 per kg. 1999 Rs. 77.93 per kg. 2000 Rs. 78.99 per kg. 18 . We agree with the appellants that import of mancozeb from other countries cannot be treated as import of identical goods into India as per the definition of identical goods in Rule 2(c). The cif price in US$ is being compared with the price in Indian rupees. It is, however, to be kept in mind that due to rupee devaluation and increase in exchange rate of US$, the cif price in US$ after conversion into Indian rupees always shows a higher price of the goods. Applying the exchange rate of US$ as mentioned in Ground F of the memo of appeal filed by Bayer of US$ 2.10 i.e. the price at which Bayer has imported the goods, then the price in Indian rupees is as under: Imports from China 1999 Rs. 91.45 2000 Rs. 94.29 Imports from Netherlands Sept. 1997 Rs. 81.40 Dec. 1997 Rs. 89.55 Jan. 1998 Rs. 88.51 Further, the quantity imported either by M/s. United Phosphorus and M/s. Lupin Agro Chemicals has not been mentioned in the impugned order. Therefore, the price at which others imported Mancozeb into India cannot be treated as import of identical goods so as to reject the value declared by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ltd. [1999 (107) E.L.T. 653], the Tribunal adopted the price prevailing in LME Bulletin as the price under Sec. 14 of the Customs Act which is now held to be not correct, by a series of decisions of the Tribunal and this decision was rendered prior to the Apex Court judgment in Eicher Tractors. In the case of Manjushree Minerals Ltd. [1993 (68) E.L.T. 273] the question before the High Court was whether cif price of the goods should be debited from the licence or the value at which the goods were assessed by the department should be debited from the licence. The issue is thus different from the one with which we are concerned in the present case. The decision in Pan Asia Enterprises [1995 (79) E.L.T. 322] was delivered prior to Eicher Tracters by the Supreme Court and the value was determined based on quotation and not based on the price at which the goods were imported into India. The cases of Kanji Morarji [1997 (96) E.L.T. 204] and Deepak Electronics [1994 (73) E.L.T. 817] were rendered prior to Eicher Tractors supra. The Tribunal s decision in CC v. Kandla v. East African Traders [2000 (115) E.L.T. 613] is also distinguishable as that case related to lifting of corporate veil in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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