TaxTMI 
TaxTMI 
1991 (3) TMI 229
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.... 2.15 US $ to 2.45 US $ and 8.11 US $ respectively. It is also proposed to confiscate the goods under Section 111(d) of the Customs Act, 1962. The proceedings were initiated on the basis of Hungarian manufacturers' price list No. 830228 issued in 1983. On receipt of the reply the Collector accepted the invoice price of the bearings and dropped the proceedings against which the appeal is filed. 3. The Collector accepted the invoice price on the following grounds: a) The invoice price is based on the price list No. 840216 dated 16th February, 1984 published by the manufacturers and attested by Second Secretary, Embassy of India, Budapest on 6th March, 1987. The said price list i.e. No. 840216 was certified to be in force by the manufacturers by their letter No. 21/637/87 dated 4th March, 1987. M/s. Metal Impex wrote a letter No. 41/617/1904 requesting the Embassy of Hungarian Peoples Republic in New Delhi to send the price list No. 840216 dated 16th February, 1984 to the Collector for 1984 shipment to India. He also found that no price list was issued in 1983 bearing No. 830228. He also found that after 1981 they published price list only in 1984. 4. He accepted th....
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....mpex Metal, Warszawa, Poland which is Government undertaking. A show cause notice was issued proposing to enhance the value and confiscate the goods under Section III(d) of the Customs Act, 1962. On receipt of the reply, the Collector accepted the invoice price rejecting the appellants' contention against which the present appeal is filed. 9. The Collector in support of his order in addition to the reasons mentioned in paragraphs 4 & 5 (supra) gave the following reasons. The deptt. has not been able to cite a single import of F.L.T. make bearings of polish origin indicating higher prices. The deptt. while adopting the price list of 1979 and reducing it by 25% presumed that the prices of 1979 continued to be same even in the case of import made in 1984. He also relied on the letter No. PN/84, dated 11th April, 1984 from the consulate of Polish People Republic in Bombay addressed to the Collector of Customs, Bombay, signed by Vice counsel Sh. Keralock wherein prices of 18 types of bearings were given and also certified that their agent in Bombay have booked the said types of F.L.T. bearings of polish make at those prices. It was also mentioned that over and above those prices....
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....elhi covering parts of crawler, tractor to be imported from Romania. Import licence bear the endorsement "Issued in 1984 Indo-Romanian Trade Plan Provision". List attached to the said import licence includes bearings of 6200 series and prices are also shown against these bearings. These prices are as per 1985 price list price. P.E.C. is a Government of India undertaking similar in character to STC. 13. He rejected the quotations and also the cost structure on the ground that the cost structure by indigenous manufacturers is not sound. He further observed the calculation given by the Ball Association is itself quite fictitious. He referred to a photocopy of Bill of Entry No. 598/75, dated 14th October, 1986 wherein Calcutta Custom House accepted the invoice prices. Holding as above the Collector accepted the invoice prices and dropped the proceedings. 14. Challenging the above orders of the Collector it is submitted by the DR that the order of the Collector is ab initio void as it is in violation of principles of natural justice. Elaborating his arguments it is submitted that Ball and Roller Bearings Association of India gave a complaint on 21st January, 1984, and, o....
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.... on the part of the Collector and the order is ab initio void on account of violation of principles of natural justice. It is also submitted by Sh. Sunder Rajan that the deptt. is entitled for a reasonable opportunity to prove their case. 15. It is next contended that the elements constituting for the purpose of charging customs duty are the price in the course of international trade where the seller and the buyers have no interest in the business of each other and the price is the sole consideration for the sale or offer for the sale. The price for bearings imported, it is submitted, have been influenced by the consideration of enabling the importers to import a larger quantity of bearings against the same import licence, in view of very restricted import policy in respect of these types of bearings during 1984 to 1985 policy. Therefore, the price, is not the sole consideration for sale or offer for sale and it cannot be said that the seller and the buyer have no interest in the business of each other. He further submitted that the price is influenced by the restricted import policy and therefore it is not the price at which the goods are ordinarily sold. The quotations se....
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....rt in question. He also relied on the prices quoted in the telex to M/s. Amit Sales Corpn. which are as follows: Type DM DM 1 = Rs. 4.10 Rs. Appx. Prices to India in 1984 (Rs.) 6200-ZZ 1.64 6.72 2.02 6201-ZZ 1.72 7.05 2.15 6201-2RS 2.04 8.36 2.42 6202-2RS 2.53 10.37 2.66 6203-ZZ 2.14 8.77 2.55 6204-2RS 2.80 11.48 5.43 6206-2RS 4.19 17.20 4.17 6208-2RS 6.62 27.15 8.04 6300-ZZ 2.14 8.75 - 6305-ZZ 3.89 15.95 4.03 6306-2RS 6.10 25.00 5.89 6308-ZZ 9.10 37.30 10.16 17.2. He submitted that the above chart indicated the price much higher than the prices indicated in the 1984 price list and even higher than the prices indicated in 1982 price-list. He relied on the prices of certain ball bearings of Romanian origin procured by the President of Ball & Roller Bearings Manufacturers of India indicating Romanian export price for 1985 to West Germany, U.K., and Singapore. Symbol Price i....
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..... 1984 c.i.f. Prices for import in India Rs. Rs. Rs. Rs. 6204 2.41 2.61 2.79 2.79 6205 3.03 3.26 3.47 2.96 6206 4.17 4.67 4.87 3.72 6207 5.34 5.71 6.12 5.86 6208 6.96 7.54 8.04 6.72 6303 2.55 2.77 2.98 2.64 6304 3.32 3.63 3.86 3.15 6305 5.12 5.54 5.90 3.97 6307 8.31 9.05 9.72 7.15 6306 6.62 6.98 7.52 4.88 30309 8.95 9.37 10.11 7.38 32207 8.70 9.44 10.15 8.08 32211 15.30 16.62 17.94 12.73 32213 21.80 23.74 29.66 19.77 32307 13.23 14.02 15.06 9.11 19. Shri Kantawala appearing on behalf of the majority of the appellants submitted that under Section 14(1) where duty is chargeable with reference to their value, the value of such goods shall be the 'price', therefore, Section 14 speaks of the price and not the value. It is next contended that Section 14 says that the price at which such or like goods are ordinarily sold or offered for sale for delivery at the time and place of importation. The place of importation being India the prices quote....
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....place under the indent of Pradeep Trading Corporation. The delegation from Romania accredited the Pradeep Trading Corpn. as one of their agent. He also submitted that the telex to M/s. Amit Sales Corpn. is not relevant as number of bearings are different. Similarly, the representation by the association is not relevant as number of bearings is different. He also submitted technocrat import telex relate to some other bearings. No show cause notice was issued and no telex is furnished to him, and the cost structure is not one of the grounds in the appeal. Therefore, it cannot be looked into. 24. In reply Shri Sunder Rajah submitted that the Collector has not applied his mind to the material before him at the time of passing order. The appeal is not beyond the scope of the show cause notice. Therefore, the Tribunal is competent to impose the penalty and requested that the Collector should be directed to determine the quantum of penalty. 25. Taking up the first contention of the appellants that they were not given opportunity to explain, and therefore, the order is ab initio void, we are of the view that the contention is opposed to the scheme of the Act. Section 122 re....
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....he facts of that case are entirely different from the facts of the present case. In the instant case on the basis of the complaint by Ball Bearings Mfg. Association an inquiry was made, searches were conducted, documents were seized. Some of the documents i.e. telex message quoting the price to M/s. Amit Sales Corpn. and also quotations furnished by the Ball Bearing Manufacturers Association i.e. Techno Import & Export, Romania and the other quotations from M/s. Rolf Weber & Co. West Germany to M/s. Ranchordass Purshotam & Co. were referred and relied on in the show cause notice and the Collector rejected all the 3 documents on the ground that they are mere quotations and the appellants failed to prove that these quotations resulted in concluded contracts or there were any actual imports in pursuance of the said quotations. He also observed that the quotation by M/s. Techno Import & Export, Romania is not relevant as it is an offer to third party country. Therefore, the contention that the appellants were not given any opportunity to substantiate their case is without any basis. We reject the same. 26. The main contention of the appellants is that the Collector erred in acc....
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....der Section 14. 29. Let us now examine the charge of undervaluation and the material in support of the same and whether the appellants have proved undervaluation on the basis of the evidence available with them. The charge of undervaluation is based on, (1) quotations (telex message to Amit Sales Corpn. seized during the search of premises of Amit Sales Corpn.). These quotations are a telex message dated 30th January, 1985 relating to the bearings from East European country issued by M/s. Theodar Lane & Co., D-2800 Bremon. The said quotation gives the price of bearings of eastern block countries like Poland, Czechoslovakia, Romania, Hungary which are at higher rate than the prices at which the impugned imports are made. (2) offer from M/s. Rolf Weber & Co. to M/s. R. Ranchordass Purshotum & Co. for various bearings of East European countries with their letter No. EXP/SCHE dated 25-1-1984, wherein the bearings of Polish origin are offered for higher price. (3) In the case of imports from Romania a telex quotation offer during 1984 and 1985 made by M/s. Techno Import and Export, Romania to a party in Singapore, U.K. and West Germany indicating higher prices for the ball beari....
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....tween India and foreign country is international trade but not intranational trade. The word intranational trade is used in contra-distinction with intranational trade. So understood, the prices quoted in the quotation referred to above apart from the reasons given above are irrelevant. This Tribunal [Manga Bros. v. CC reported in 1984 (15) E.L.T. page 151], under more or less similar circumstances held "that the letter of US firm showing prices of cassette tape for insignificant value for the reason that this can at best be treated as a letter of offer to interested parties for supply of goods mentioned therein but it is neither an indent nor an invoice and, secondly, this letter reference to the shipment from U.S.A. but we are dealing with goods imported from Japan; in fact, not even a single importation of goods at the quoted prices has been shown to have taken place from U.S.A. at any port of India. Although proving a case of undervaluation is difficult as the evidence produced by the deptt. is not sufficient to pin down serious charge like undervaluation against the appellants. Accordingly, goods have to be assessed to duty on the basis of value declared in the Bill of Entry f....
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....e. 34.1. In our view in the absence of evidence that the respondent remitted to the foreign supplier more than what is indicated in the invoices, or that there are contemporaneous sale at higher price or that the sellers and buyers are interested in the business of each other, the nature of the import policy cannot be treated to be an extra commercial consideration to discard the invoice price. 35. The arguments of Shri Sunder Rajan relying on various prices referred to in paragraph 17- that there is a steep rise in the price of ball bearings and therefore, lower price indicated in the invoice price of the relevant imports does not represent the genuine price in case of import from Romania is without any basis and is liable to be rejected. The price referred to and relied upon in the show cause notice relate to ball bearings number 6305 to 6310, 30203, 30204, 3211, 32213, 30309, 6207, 6208, 6307, 6308, 6204 whereas the ball bearings imported now are bearings Nos. 6215 K, 6213, 6214, 6302 under bill of entry No. 1254/112, bill of entry No. 1254/82, bill of entry No. 1254/104. Therefore, the prices quoted by the Ball bearing Manufacturers Association relying on cost o....