TMI Blog2001 (7) TMI 253X X X X Extracts X X X X X X X X Extracts X X X X ..... 988 for clearance of a total quantity of 958.363 MTs of High Density Polyethylene (HDPE), Blow Moulding Grade, of Canadian and Hungarian origin supplied by foreign suppliers under contracts entered into in February, 1988. The goods had arrived at Kandla Port during May-June, 1988. The declared prices of the goods were in the range of US $ 860 to 910 PMT. On the basis of intelligence gathered by DRI and the results of subsequent investigation, a show cause notice [SCN] was issued to the appellants asking them as to why the assessable value of the goods should not be enhanced to US $ 1250 PMT. The SCN further proposed to recover differential duty on the imported goods and also to impose penalties on the appellants. The appellants contested the SCN. The Collector of Customs, Kandla passed order dated 27-11-1991 in adjudication of the dispute. That was an order confirming the demand of duty against the appellant-company and imposing penalties on both the appellants. That order was taken in appeal by the aggrieved parties before this Tribunal. The Tribunal, by Final Order Nos. 1303 to 1308/96-A, dated 25-3-1996, set aside the order of the Collector and remanded the matter to him for de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the goods on the date of the contract and not the price prevailing at the time of import that was relevant for purposes of valuation under Section 14 of the Customs Act; that the Department had no case that the contract entered into between the appellants and their foreign suppliers was fabricated and not genuine or that the buyer and the seller had any interest in each other except in the course of business; that the prices of the goods involved in the nine cases of contemporaneous imports relied on by the Department were not to be taken as the basis for valuation of the subject goods inasmuch as there was no evidence to show that the former goods were identical or similar to the latter goods in description, quantity, quality and the like; and that, in any case, valuation of imported goods would not, ipso facto, call for penal proceedings against the importers under Section 112 read with Section 111 of the Customs Act. 3. The Collector of Customs who originally adjudicated the dispute overruled all the objections raised by the parties and upheld the Department's allegations. We note that, in their appeal filed with the Tribunal by the parties against the original order of adj ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... without considering the nine Bills of Entry could not be sustained. 5. Inviting our attention to the telex messages of the shipper, ld. Sr. Counsel submitted that those documents were recovered by the DRI from the premises of Shri Prakash Goenka who had nothing to do with the appellants' importation and there was nothing in those documents to connect the prices of HDPE stated therein to the goods imported by the appellants. There was no evidence of the telex quotations having resulted in actual transaction between the shipper and Goenka's firm viz. IBT Corporation. Therefore, Counsel submitted, the prices quoted in the telex were no valid basis for enhancement of value of the goods imported by the appellants. Ld. Sr. Advocate sought to draw support to this argument from the decision of the Hon'ble Supreme Court in the case of Sounds N. Images v. Collector of Customs [2000 (117) E.L.T. 538 (S.C.)] and also the decision of this Tribunal in Laxmi Colour Lab v. Collector of Customs [1992 (62) E.L.T. 613 (T)]. 6. Referring to the letter dated 15-6-1988 of the President of the AIPM Association, ld. Sr. Counsel submitted that the letter had no evidentiary value as it was not proved by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under-valuation as held by the Commissioner. Ld. Counsel made a further reference to the AIPM Association letter stating prices of plastic materials for the month of May, 1988. He submitted that the list of prices in that letter did not provide transaction values and that, in the absence of instances of contemporaneous imports at those prices, the list was no evidence of alleged under-valuation by the appellants. In this connection, Counsel relied on the Tribunal's decision in the case of Adani Exports Ltd. v. Commissioner of Customs, Visakhapatnam [2000 (116) E.L.T. 715 (Tribunal)]. 8. Reverting to normal value of goods, ld. Counsel submitted that the burden was on the Department to establish satisfactorily that the value of the imported goods was not what was declared by the importer. It was incumbent upon the Department to establish as to what the value actually was. In the instant case, admittedly, the prices of HDPE materials were fluctuating. The prices declared by the appellants were in the range of US $ 860 to 910 PMT, the actual prices at which the foreign suppliers supplied the goods to the appellants under the contract. The Department had no case that the contract was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d order of the Tribunal in his de novo adjudication of the case. We note that the remand order was one for de novo adjudication of the case in the light of the observations contained therein. There was a clear directive in the remand order to the Commissioner to consider the nine finalised Bills of Entry and the Order-in-Original dated 5-3-1991 relied on by the appellants. It was also directed that the appellants' plea for cross-examination of the author of the letter dated 15-6-1988 of the AIPM Association also be considered. It was specifically observed by the Bench in the remand order that any verification of the prices mentioned in the Association's letter could be done only by such cross-examination. There was yet another observation of the Bench to the effect that, in view of the admitted fluctuation of prices of the goods, the appellants' plea that the price of the goods in question could have been US $ 860 PMT in January, 1988 required fresh consideration. It was, further, observed by the Bench that the plea made by both sides with regard to the comparability of the subject goods to any other goods with reference to specific gravity also required to be appreciated on the ba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... PEC BLOW MOULDING GRADE, Canadian origin, NOVACOR make vide page 278 of the appellants' Paper Book. That was a quotation for an approximate quantity of 456 MTs, to be shipped in February-March, 1988. In the subsequent telex No. 2654, dated 15-2-1988, the same foreign shipper informed Shri Goenka of IBT Corporation that "this parcel of 450 MT is meanwhile sold". The shipper, however, in the second telex, offered about 500 MTs of OFFGRADE HDPE of Canadian origin, NOVACOR brand at the price of US $ 1230 PMT CIF, Bombay vide page 277 of the Paper Book. We find that, though the above quantity of 456 MTs of HDPF was sold by the foreign supplier as represented in their telex dated 15-2-1988, there is no evidence on record to show the price at which the said quantity was actually sold. As regards the price of the goods quoted in the telex dated 15-2-1988, we find that there is no evidence of that quotation having resulted in any contract followed by actual importation. Such a quotation cannot be any basis for determination of the assessable value of the goods imported by the appellants. Ld. Sr. Advocate's arguments on the point are supported by the ratio of this Tribunal's decision in Laxm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2000 MTs. In any case, the telex quotation is no evidence of contemporaneous import of identical goods and the price quoted therein is no 'value' for purposes of Section 14(1)(a) of the Customs Act. For all these reasons, the ratio of the decision of this Tribunal in the case of Laxmi Colour Lab (supra) is squarely applicable to the present case and, accordingly, we reject the Department's evidence of telex for purposes of valuation of the goods in question. 10.4. It appears that the adjudicating authority has heavily relied on the depositions of Shri Goenka given in cross-examination and treated the same as proof of the contents of both the telex message the AIPM Association's letter. Now that we have already rejected the telex evidence, the reliance placed by the Commissioner on Goenka's depositions with reference to the contents of the telex message is no longer valid. As regards the depositions of Goenka with reference to the contents of the AIPM Association's letter, we observe that he was not the signatory to the letter, nor could he establish that he was otherwise competent to prove the contents of the letter. He was a partner of a rival Bombay-based importing firm viz. IB ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , 1988. 10.6. With regard to the AIPM Association's letter, ld. Counsel has relied on this Tribunal's decision in Adani Exports Ltd. (supra). In that case, the Bench had observed that the PLATT's Price Report was merely a compilation of price ranges of plastic materials and was not based on transactions, and held that price ranges in financial journals like PLATT's Report were not relevant as acceptable transaction values. To our mind, still worse could be said about the price ranges stated in a purely private unproven document like the AIPM Association's letter. 10.7. Ld. Sr. Advocate has argued that, the genuineness of the contract not having been even doubted by the Department, it was the contract which was sacrosanct and, therefore, the contracted prices of the goods should be accepted as normal value in preference to any other price. We are unable to accept this argument. In the case of Rajkumar Knitting Mills (supra) cited by ld. DR, it was held by the Hon'ble Supreme Court that the relevant date for determination of value for assessment of Customs duty was the date of importation and not the date of contract. The decision of the Apex Court was rendered in a case in which ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
