TaxTMI 
TaxTMI 
2016 (4) TMI 882
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....ained following endorsement: "Products for display at Broadcast India -95 exhibition which is going to be held in World Trade Centre, Bombay, India between 2nd to 4th November 1995 and to be returned after the exhibition." The cameras imported with landed cost of Rs. 3,22,026/- by above bills of entry were sold for about Rs. 26.43 lakhs. Search of the appellant premises were made and certain documents were recovered. It emerged that appellants are exclusive agents of Hitachi Denshi Ltd., Japan for their entire range of products. The appellants were to negotiate sales with various purchasers like, Doordarshan India, BEL, Asianet, Gemini TV etc. In the search minutes of meeting between Mr. Nitin Shah of the appellants, Mr. G Fujiki of M/s. Sansho Co. Ltd., and Mr. K Osada of Hitachi Denshi was recovered. The said minutes also contained as an annexure the price list of Hitachi where prices of different products were mentioned. The prices were net ex-godown (Japan) prices in Japanese Yen. The price of Z-ONE-D digital camera was quoted as 9,55,000 Japanese Yen. Also recovered in the search was an Estimate dated 30/08/95 of M/s. Hitachi Denshi Ltd. addressed to the appellants....
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..... It was alleged that the seized documents reveal that they were to purchase 2 sets of Z-ONE-D Cameras from M/s. Hitachi Denshi Ltd. and that there was no precondition of returning the goods back to Japan in the sale. It was alleged that the declaration was only a clever poly adopted by the noticees to divert the attention of the Customs authorities from the alleged under invoicing of the imported goods. That instead of re-exporting the imported goods after exhibition the same were sold it to M/s.Gemini Television, Chennai for a sum of about Rs. 26.43 lakhs. 2.1 It was alleged that as per Rule 3 of the Customs Valuation Rules, 1988 the value for the purpose of assessment should be transaction value, i.e. the price actually paid or payable for the goods sold for Export to India, adjusted in accordance with the provisions of Rule 9 of the said rules. Under Rule 9 discounts are admissible if the same were shown as part of the agreement entered. Further, the discounts if any available to a particular importer by way of negotiations are admissible, provided it is not unusual in the course of international trade and the circumstances of the transaction justify a discount. It was alleg....
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....g contemporaneous identical or similar imports is not available for arriving at the value under Rule 5 and 6 of the CVR, 1988. Hence Rule 5 and 6 are not applicable. It was asserted that data relating to identical or similar imported goods sold at the same commercial level as that of the imported goods is also not available. Hence, Rule 7 is not applicable. It was asserted that no quantifiable data with regard to cost of production and cost overheads have been produced by the importers, Rule 7A is also not applicable. Therefore, the value has to be determined under Rule 8 read with Rule 9, using reasonable means consistent with the principles and general provisions of CVR read with Section 14 (1) of the Customs Act. 2.4 It was asserted that the manufacturers (M/s.Hitachi Denshi Ltd., Japan) had published different Price Lists at different occasions. These were the price lists available with M/s. Sansho Co. Ltd., Japan, authorized export agents of the manufacturers in Japan. Hence, the prices indicated in these price lists dated 8/2/95 and 18/12/95 (Appendix VI & VIII) were taken to indicate the actual prices of the Hitachi Z-ONE-D Camera systems and accessories imported by the N....
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....ne else wishing to buy the old stock, there is no reason why the declared value in question was not accepted under Rule 4(1). 3.1 The learned Counsel argued that even if the price list is taken to be true it cannot be treated as the contemporaneous import for imports made in 1997 and 1998. The price list is of the year 1995. It was argued that the prices of electronic goods keep falling every year and therefore, the price of 1995 cannot be used to arrive at value of goods imported in 1997 & 1998. It was argued that the valuation rules have to be sequentially applied. The learned Counsel argued that the rules 4, 5 6 & 7 have not been given due consideration before jumping to Rule 8. For this purpose he relied on the decision of Hon'ble Supreme Court in case of South India Television Vs CC Calcutta - 2007 (214) ELT 3 (SC). In the said case the Honble Supreme Court has observed as follows: 8. Before concluding, we may point out that in the present case at the stage of show cause notice, the Department invoked Rule 8 on the ground that the invoice submitted by the importer was incorrect. In Eicher Tractors (supra) this Court observed that Rule 4(1) of the Customs Valuation....
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....ters and telexes received from SKF Oversees Bearings Division, Sweden which indicate the new pricing policy of the foreign supplier. As pointed out by the Addl. Collector of Customs in his order dated April 16, 1985 the said documents show that 20% discount is allowed to the original equipment manufacturers who import for fitment in their manufactured products and for this build up inventories with sizeable orders after securing favourable prices between various competitors but as regards canvassers and Skefko, who import in even greater bulk for the purposes of only trading, the policy envisaged that they may even secure lower price particularly if they generated additional volumes of sales. The documents seized during the search and seizure that were produced by the appellants before the Customs authorities (genuineness of which was accepted by the Addl. Collector of Customs) show that apart from Mirah Exports a number of other importers, namely, Skefko, Amul Engg., Krishna Engg. Works, Delhi, Jayaveer Forge, Davangere, Ajay Trading Co., Delhi, Ramgopal Lachmi Narayan, Bombay, Sanmukh Engineering Industries, etc. had also imported comparable quantities of similar bearings at the ....
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....nce that the Camera with landed costs of Rs. 3,22,026/- were sold to domestic buyer for about Rs. 26.43 lakhs. On investigation it was found that it was declared to customs that goods were imported at a special price for the purpose of exhibition and re-export thereafter. It was gathered from various price lists recovered from the premises of the importer that the said cameras were not imported from the manufacturer but from its export agent. There was no evidence of the intention to re-export the said cameras appearing anywhere in the documents. The appellants have raised a question about the validity of the rejection of the declared invoice price. We find that the appellants have argued that a special price was offered as the import was intended to be for the purpose of display in exhibition for the purpose of promotion of sales. The rule 4 of the Customs Valuation (Determination of Price of Imported Goods) Rules, 1988 reads as under 4. Transaction value - (1) The transaction value of imported goods shall be the price actually paid or payable for the goods when sold for export to India, adjusted in accordance with the provisions of Rule 9 of these rules. (2) Th....
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.... and not the ordinary price of such goods in the course of international trade. The price in the ordinary course of international trade has been indicated in the price list published by the manufacturers in USSR. We, therefore, find no ground to interfere with the order of the Tribunal. We agree with the reasoning and the findings reached therein. We also endorse the wish and hope entertained by the Tribunal in Para 3.3 of its order regarding heavy demurrage. It is clear from above that special prices offered for a certain purpose are not the ordinary prices in in the course of international trade. The declared prices need to be rejected on this ground. 5.1 Secondly it is seen from the documents recovered that the price list quoted a price of Japanese Yen 9,55,000 for each Z ONE D camera. The minutes of the meeting dated 29.8.1995 between Mr. Nitin Shah of the appellants, Mr.G Fujiki of M/s. Sansho Co. Ltd., and Mr. K Osada of Hitachi Denshi was recovered contained as an annexure the price list of Hitachi where prices of different products were mentioned. It is noted that the said minutes are specifically for the modalities of the promotions of sales of Hitachi Denshi product....
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.... No agent can offer a discount of that magnitude without receiving the same from the manufacturer. Moreover this price was meant for special circumstances where the importer was required to participate and display the products in exhibition for promotion of sales. For this reason the invoice produced by the appellant cannot be accepted. It is seen that the price of all items in the invoice are showing discount ranging from 82% to 89% from the price list recovered during the search. Such discounts are not offered on the price list of the manufacturer and therefore are not available to others. The discounts are unreasonable and therefore a reason to reject the declared prices. The appellants have relied on the decision of Hon'ble Supreme Court in the case of Eicher Tractors Vs. CC - 2000 (122) ELT 321 (SC) to assert that it is possible to have large discounts. It is seen that the facts of the case are different. In the said case the discount offered in that case was for a five year old stock. In those circumstances the purpose may have been to clear the stocks. In the instant case the goods are brand new and the reason for any discount is to penetrate into the market. 5.4 The appe....
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....or valuation of goods for the purpose of assessment. Section 14(1) which is relevant for our purposes reads as under : "Valuation of goods for purposes of assessment: (1) For the purposes of the Customs Tariff Act, 1975 (51 of 1975), or any other law for the time being in force whereunder a duty of customs is chargeable on any goods by reference to their value, the value of such goods shall be deemed to be the price at which such or like goods are ordinarily sold, or offered for sale, for delivery at the time and place of importation or exportation, as the case may be, in the course of international trade, where the seller and the buyer have no interest in the business of each other and the price is the sole consideration for the sale or offer for sale: Provided that such price shall be calculated with reference to the rate of exchange as in force on the date on which a bill of entry is presented under Section 46, or a shipping bill or bill of export, as the case may be, is presented under Sec. 50." According to the above provision the value of the goods shall be deemed to be the price at which such or like goods are ordinarily sold, or offered for sal....