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TMI Blog1985 (3) TMI 288X X X X Extracts X X X X X X X X Extracts X X X X ..... ound; 1.37 and £ 1.19 It was therefore charged that the appellants had misdeclared the value, rendering the goods liable for confiscation under Section 111(d) and(m) of the Customs Act read with Section 3(2) of the Import and Export (Control) Act, 1947. The appellants were called upon to show cause against such action being taken and also for payment of duty at the value suggested. 2. The appellants under their reply dated 14-4-1978 contended that the prices mentioned in their invoices were correct and proper and had been arrived at on negotiations and there had been no misdeclaration. They claimed that the sellers had purchased the subject goods in 1976 itself at the prices at which they were now disposed of (except in respect of certain items which were slow moving) and that as the sellers could not obtain better prices in spite of the time during which they had the goods in stock they were prepared to sell at the prices mentioned in the invoices and they were therefore the proper prices. They further claimed that the price list of 7-2-77 of A.E. Auto Parts (relied upon by the department) was only a mere offer and indicated the maximum prices and it could only be the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be arrived at on application of the principles of Section 14(l)(a) of the Customs Act. This could be found stated at page 291 as follows : "This actual price of supply which we would assume is a genuine price in that deal can vary from the international market price which is the 'value' for the purpose of Customs taxation." 5. It is therefore to be considered whether the price mentioned in the invoices relied upon by the appellants is the true price and if not what would have been the deemed price as under Section 14(l)(a) of the Customs Act. It is with reference to findings on these points that the decision will have to be given in this appeal. 6. The appellants had relied upon the letter dated 22-8-1977 of M/s. Harvin Exports under which they have offered to M/s. Overseas Manufacturers Sales Company, Bombay, main bearings AJH 5285 (of various sizes) at £ 0.58 each and also connecting rod bearings AJH 5286 (of various sizes) at £ 0.69 each. The prices are mentioned as FOB. The appellants have produced another letter dated 19-9-1977 by Overseas Manufacturers Sales Company to M/s. Harvin Exports whereunder reference is made to a further negotiation for suppl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urers of the subject goods) issued to M/s. Harvin Exports on 4-6-1976 (invoice No. 3108) and 31-3-1976 (invoice No. 2922), copies of these invoices having been sent by M/s. Harvin Exports to the appellants at their request. It is pointed out for the appellants that the subject goods had been received by M/s. Harvin Exports under these invoices and had been therefore lying with them since 1976 and as they could not be disposed of by M/s. Harvin Exports even by the end of August 1977 they offered them for sale under their letter dated 22-8-1977 at the rates mentioned therein. The appellants had during their appeal before the Board relied upon a letter dated 27-2-1978 from M/s Harvin Exports in which they had referred to the abovesaid commercial invoices. The Board had no doubt observed that the said letter dated 27-2-1978 had not been produced though referred to. Shri Sogani states that a copy of the letter was in fact given. In any event we have looked into a photocopy of that letter also. 10. The acceptability of the arguments above-mentioned would therefore depend upon the truth of the allegation of stock having been held as dead stock for over 1 1/2 years and therefore bein ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cate the excess quantity supplied compared to the stock offered for sale or the orders placed for supply. 11. As earlier mentioned the acceptability of the case of the appellants would depend upon the truth of their claim that in view of the stock having been held as dead stock for quite some time the exporter was prepared to offer the same at a particular price and that would therefore have been the normal international price at which such goods would have been available for anybody. But we have also seen that though the declared stock (dead stock as claimed by the appellants) was at a particular figure, and the appellants had placed the order for the entire stock as mentioned in the letter dated 22-8-1977, the actual supply was, at any rate so far as bearings of particular sizes are concerned, of a quantity in excess of the order. That would mean that at any rate so far as this excess was concerned it could not have formed part of the dead stock. Nor is there any explanation offered why and in what circumstances this excess supply was made by the exporter even without an order therefor. This circumstance would only excite the suspicion that the negotiations between the part ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ces produced and relied upon by the appellants are not acceptable at face value. On the other hand the circular letter dated 7-2-1977, coming as it does from an authorised agent of the bearings in question and addressed generally to traders and indicating the special net price for India, would appear to us to be the proper basis for arriving at the international price which would be the basis for the deemed value under Section 14(l)(a) of the Customs Act. 13. We therefore hold that the appellants are proved to have intentionally misdeclared the prices in the invoices as well as the bill of entry. We further hold that for purposes of assessment of duty also the prices mentioned in the circular letter dated 7-2-1977 would be the proper value. The penalties levied are also not excessive having regard to the volume of import. Accordingly the orders of the lower authorities are confirmed and this appeal is dismissed. 14. [Pen M. Gouri Shanfcar Murthy]. - I agree with the order proposed but for slightly different reasons. 15. As I had occasion to observe in a separate but concurring judgment in 1984 (15) E.L.T. 137 [OEN (India) Ltd. v. C.C. d C.E.J, the deemed value of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce. 20. The actual price after import, accordingly, must be higher than what was quoted since the ocean-freight, insurance, import duty and expenses in clearance were not reflected in the aforesaid net export price. At any rate, there is no evidence of the prices having gone down for the identical goods or of any truncations of sale and import or even offer for sale at lower prices. The Invoices dated 4-11-1977 from M/s. Harwin Exports and 28-11-1977 from M/s. Maphil Traders Ltd. and the special offer for camshaft bush C 3023 S dated 15-11-1977 relied upon for the Appellant as showing a decline in prices from those quoted in the aforesaid letter dated 7-2-1977, do not reflect the prices of goods identical with those actually imported. The mere fact that the prices for other parts suffer a decline does not necessarily mean and imply that the prices quoted for identical goods also declined by the time of actual import. Nor does the aforesaid offer dated 7-2-1977 lose its probative value just because the prices quoted could have been reduced by negotiation since in terms of the aforesaid Valuation Rule, an offer by itself is sufficient to be the basis of the determination of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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