TaxTMI 
TaxTMI 
2003 (4) TMI 483
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....: BB 53 9,000 4,77,000 Wittocx Impregnated Scaives (Cobalt Free) REF : LMJ-1 Width of Diamond Layer : 30 MM Grain : BB 3 27,00 81,000 Packing : 14,300 --------- Total Ex-Factory : 5,72,300 Insurance : 2,400 Air Freight : 49,200 ---------- Total CIF Bombay : 6,23,900 ---------- The details in the invoice as extracted above are also followed by : "PLEASE NOTE : SCAIVES PACKED INTO 01 CASE 0.85 X O.65 X 0.85H: * SCAIVES ARE NOT WORKED-IN FOR PURPOSE OF EYE-CHECKING: * THE CASE IS MARKED WITH YELLOW BAND ACROSS FOR EASY IDENTIFICATION" However, the appellants submitted that both the types of SCAIVES fall under the same heading of the Tariff Schedule. They declared the consolidated value of the subject imports. 2. Since the invoice for the imports of the goods had declared two different types of scaives at different unit p....
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....th such description as mentioned above in the market and whether any other manufacturer supplies Scaives with a reference to the extent of impregnation. It was observed from the study that the catalogue and literature supplied by the manufacturer did not indicate the existence of different variety of Scaives with respect of - (a) extent of impregnation i.e. fully impregnated, 1/3rd impregnated, 1/5th impregnated, etc., or (b) LMJ-1, LMJ-2, LMJ-3, etc. 5. The importer all along have been insisting that there was a vast difference between the two types Scaives LMJ-1 and LMJ-3 imported by them and in support of their claim on the basis of certain write-up given by the suppliers M/s. Wittox N.V., which outlines the basic difference between the two types of scaives. They have claimed the allegation of show cause notice issued were based on insufficient appreciation of facts. According to the importer, since the show cause notice itself states that a variety of scaives are imported with different specifications at different prices and in direct proportional to the "extent of impregnation" and it was not mandatory for a supplie....
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.... be increased for the purpose of assessment as proposed in the above show cause notice. The appellants also submitted that the enquiries were conducted by the department through Second Secretary in the High Commission of India in London which they claimed was based on the investigation carried out by one Mr. L. Van Schorisse, Head Inspector of Excise and Customs in Antwerp concerning different types of cases. That report has not been relied upon in the show cause notice. They relied on the certificates from a Professor Wettinck, which was to prove that LMJ-1 and LMJ-3 are the result of development efforts made by the manufacturer over a period of 20 years and that the manufacturing formula has been tested in University of Ghent (Belgium) and that itself was probably possible to produce Scaives of the said types in the prices declared i.e. LMJ-1 for 27000 BEF and LMJ-3 for 9000 BEF and they relied upon various case laws. 8. After hearing both sides and considering the submissions, it is found - (a) The Commissioner has gone by the second test report by IIT, of samples forwarded to them. He has considered that report going to determine the crux of t....
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....rame. Consequently LMJ-1 scaives, compared with LMJ-3 scaives, have a more equal hardness all over the surface of the scaife. Extra man-hours are also required to give out LMJ - scaives a more accurate level with flatness between 1 and 2 micron, going up to 5 micron for LMJ-3 scaives. The use of more expensive but in quality also better raw materials, as well as a more profound finishing of the product, explains the difference in price but also the difference in quality : LMJ-1 scaives will provide faster polishing and better smoothing, compared to LMJ-3 scaives." A perusal of the above would show, that LMJ-1 scaives contain high quality, special selected and well sized Micron Powder with a high concentration on natural diamond powder, whereas LMJ-3 Scaives would contain poor quality powder, with only synthetic diamond powder. The fabrication is on the moulding frame, which are made of a special Refractair steel, used only once in the manufacturing of LMJ-1 Scaives, while for LMJ-3, the said steel frame is used several times. It is claimed that LMJ-1 as compared to LMJ-3 Scaives require extra man hours to fabricate. Th....
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....e LMJ-3 is refurbished, and that claim is not assailed. Therefore there is no misdeclaration proved. (c) The manufacturers and appellants, both have claimed that LMJ-1 and LMJ-3, are with different, declared prices; No finding has been arrived at to challenge the different prices as shown in the invoice. The invoice price should be the transaction value for the imported goods. From the Interpretative Notes of the Customs Valuation (Determination of Price of Imported Goods) Rules, 1988 and especially note to Rule 4 which reads as follows - "Note to Rule 4 Price actually paid or payable. The price actually paid or payable is the total payment made or to be made by the buyer to or for the benefit of the seller for the imported goods." It would appear that Valuation under Rule 4, the Transaction Value in the facts of this case should be total c.i.f. Bombay : BF 623900 on which Air freight deductions are to be granted. This total price payable cannot be ignored and the transaction value can be departed from, only in terms of the conditions provided under the rules. None of the conditions ....