TaxTMI 
TaxTMI 
2013 (9) TMI 92
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....centrates of Alcoholic Beverages, matured for more than three years" and the total quantity of import was 16000 litres of Scotch Whisky at a unit price of US $ 1.00 per bulk litre (CIF), Goa. It was also revealed that they had imported another such consignment vide Bill of Entry No. 107071 dated 28-9-2006 wherein also a total quantity of 15400 litres of the said goods had been imported at US $ 1.00 (CIF), Goa and three drums of "Concentrate of Alcoholic Beverages matured for more than 12 years" containing 600 litres at a unit price of US $ 2.00 (CIF), Goa per bulk litre. Both consignments were imported from M/s. Loch Lomand Distilleries Ltd., Scotland, U.K. and covered by invoices No. 4254 dated 15-8-2006 and 4823 dated 17-8-2007. The Letter of Intent dated 17-3-2006 and a letter dated 29-5-2007, issued by the foreign supplier certified the strength of alcohol in the goods imported was not less than 62% and not more than 67% alcohol by volume. The representative samples were also drawn from the consignment which was forwarded to the Deputy Chief Chemist for examination and the test report issued by the Deputy Chief Chemist indicated that the samples are in the form of reddish brown....
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....ellant-firm and a penalty of Rs. 1,00,000/- each was imposed on Shri Vipan Malhotra and Shri Pawan Agarwal, directors of the appellant firm. Against this order, the appellants are before us. 4. The learned Advocate for the appellant submits that the rejection of the declared transaction value was neither legal nor proper. As per the statement dated 30-10-2007 recorded from Shri Pawan Agarwal, Director of the appellant, the price of concentrate of Scotch whisky was GBP 1.03 per litre. After negotiating, the price was finally brought down to US $ 1 per litre. Letter of Intent dated 17-3-2006 was issued by the foreign supplier M/s. Loch Lomand Distilleries Ltd. and thereafter proforma invoice was also issued. The appellant applied to their bank for issuance of irrevocable Letter of Credit in favour of the foreign supplier and, accordingly, shipment was effected by the foreign supplier. The statement and the documentary evidence available on records conclusively established that the declared price was genuine and was a negotiated price. It was the transaction value and nothing over and above the price was paid by the appellant to the foreign supplier. It was further contended b....
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....ons in pricing to other clients in India, I can confirm that each different blend has a different malt content and that the price charged will - in great part - be dependent on the malt content (as the cost of producing malt whisky is much higher than that for Grain Scotch Whisky). The level of complexity in each blend is - in part - determined by the malt content. A higher malt content will, generally speaking, produce a blend of more intense flavours and thus more suitable for blending with neutral spirit (what we term an "ad-mix") for products such as Indian Whisky. The price charged for each blend to each different customer will be dependent on the blend supplied to them and also what profit margin can be achieved within the relevant sector of the market." 4.1 The learned Counsel also submitted extracts from the website which shows that the production of grain whisky is much easier and cheaper than distillation of malt whisky. The learned Counsel also relies on the judgment of the Hon'ble Apex Court in the case of Eicher Tractors Ltd. v. Commissioner of Customs, Mumbai - 2000 (122) E.L.T. 321 (S.C.) wherein it was held that existence of the price list of the forei....
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....thereon and consequent penal liabilities. 7. We have carefully considered the rival submissions. 7.1 After hearing the arguments, we are of the view that the appeal itself can be disposed of at this stage. Accordingly, after granting stay, we take up the appeals for consideration and disposal. 7.2 In his statement recorded under Section 108 of the Customs Act, 1962, Shri Pawan Agrawal had clearly explained the reasons as to how they were able to negotiate a lower price of US $ 1 per litre in respect of the imports made by them from M/s. Loch Lomand Distilleries Ltd. The question put to him and the replies given by him are reproduced below :- Q10. In that case how come that you were given the discounted price of $ 1.0 per litre? Ans. We bargained with Mr. Gavin J.P. Durnin, Director (Sales) of M/s. Loch Lomand Distilleries Ltd., that we are starting a new business, we will be promoting their companies product in India and we have to compete with the established players in the market. I would also like to state that we are the first company in India which is bottling/selling scotch whisky under private brand name by utilising 100% ingredient of impo....
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.....P. Durnin, the letter of intent was issued to us. I am herby submitting copy of the same duly attested by me. 7.3 From the above statement of the Director of the firm, the reasons for obtaining a lower price due to intense negotiation have been clearly brought out and the Revenue has not discharged the onus cast on them by contraverting the statement of Shri Pawan Agrawal. From the records we see that the appellants have imported the concentrate Scotch whisky for dilution and sale and not for blending. In the case of M/s. Mc Dowell Co. Ltd., they had imported the Scotch whisky for blending with Indian whisky as is evident from the labels of Mc Dowell Whisky. This very clearly shows that the purpose for which the concentrates of alcoholic beverages imported was different. 7.4 Further the letter dated 27-10-2009 from the foreign supplier clearly indicates that the Scotch whisky supplied to the appellant was a blend of grain whisky and malt whisky and was suitable to be used for direct consumption after dilution with de-mineralised water. The foreign supplier in the said letter has also confirmed with respect to the difference in the price between the goods supplied t....