TaxTMI 
TaxTMI 
1985 (3) TMI 288
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....arings to be respectively- GBP 1.37 and GBP 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 pri....
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....e as between the parties the department would be entitled to levy duty on the deemed price as would 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 GBP 0.58 each and also connecting rod bearings AJH 5286 (of various sizes) at GBP 0.69 each. The prices are mentioned as FOB. The appellants have produced another letter dated 19-9-1977 by Overseas Manufacturers Sa....
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....ovesaid the appellants relied upon the commercial invoices of the Glacier Metal Company Ltd. (the manufacturers 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....
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....respect of at least certain types of bearings the supplies under the two invoices had exceeded the stock offered for sale under letter dated 22-8-1977 and also the orders placed following that letter. The excess is seen to be as follows : Bearing No. AJH 5285=M3157M:    40 (450)                        .60 (50) Bearing No. AJH 5286= B4170M :   20 (202)                        .40 (500)                        .50 (50) The figures in bracket indicate 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 pric....
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....ly before the lower authorities. Nor has been any application made to receive this as an additional evidence. It is not known whether the invoice now relied upon by the appellants was itself the subject matter of any adjudication or whether it had been accepted as such for assessment in connection with that import. In these circumstances we are not inclined to go into that matter any further or to act upon evidence based on that import to disbelieve the prices mentioned in the circular letter dated 7-2-1977. As mentioned earlier, that circular letter is by an authorised supplier of Glacier bearings, mentioning special net prices for India. In the absence of any acceptable evidence to doubt the prices mentioned therein we do not see any reason why that should be disregarded. 12.  It is therefore seen that the invoices 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 pr....