TaxTMI 
TaxTMI 
2004 (3) TMI 117
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....rts were thereafter cut out and fabricated into seat covers. This 180 cm fabric was invoiced on per running meter length. Due to change effected by the supplier of the fabric, the width of the fabric was reduced to 150 cm from 180 cm. The appellants therefore negotiated a price reduction and explained defending the proposed oral charges of undervaluation made by the Customs Authorities as follows - (i) The 180 cm and 150 cm fabrics cannot be considered similar or identical goods since 150 cm width is non-standard. (ii) Price for 150 cm width fabric is negotiated price on account of extra consumption of fabric, additional labour costs as evidenced by documents submitted including letter dated 23-4-1997 from the supplier i.e....
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....and therefore, in that regard, there was no difference between the 180 cms fabric and 150 cms fabric, is very relevant. As regards the transaction value of the impugned imported goods, it is found to be much less when compared to the fabrics of 180 cms on a pro rata basis. The appellants have not produced any evidence to show that the transacted price was the price at which the goods are normally sold by the supplier. Instead the correspondence between the appellants and the importers clearly show that the same is a special price : letter dtd. 23-4-97 from M/s. Guilford, the supplier of the goods, to the appellants makes it clear that the offer for sale was subject to "your support for our participation on the Woven Bolster Programme " in I....
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.... (iv) As regards the charge of mis-declaration, I observe that the letter from the supplier produced by them clearly shows as discussed above that the sale was subject to a condition for which a value cannot be determined in respect of the goods being valued. It has also not been proved that there has been any other payment. However, they did not highlight that the sale (import) was subject to the condition that the buyer will extend "support for the participation of the supplier on the Woven Bolster Programme". These aspects may be taken into consideration while adjudicating the case during the de novo proceedings." and remitted the matter back to the Deputy Commissioner for deciding the issues afresh as per the findings give....
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.... From : Ian Macpherson and Tony Millington Dear Mrs. Ravindran, Further to the fax of 23/4/97, please find here our proposal for supplying Avon as a MAF. The price is GBP 4.32/metre at 1.5 metre width, f.o.b. Coglin. The run out date is 1/98, when woven bolsters are introduced. An integral part of this offer is that Guilford participate in developing and then supplying this new woven bolster. Our aim is then to manufacture it at Poona as previously explained. You mentioned there was already a high stock level of Avon in the system. For our planning purposes we need to know your further requirements, at 1.5 metres width, between now and the 1/98 changover. Please confirm this offer is ....
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....d on the basis of a form of payment extraneous to the imported goods, such as where the imported goods are semi-finished goods which have been provided by the seller on condition that he will receive a specified quantity of the finished goods. However, conditions or considerations relating to the production or marketing of the imported goods shall not result in rejection of the transaction value. For example, the fact that the buyer furnishes the seller with engineering and plans undertaken in India shall not result in rejection of the transaction value for the purposes of Rule 4. Likewise, if the buyer undertakes on his own account, even though by agreement with the seller, activities relation to the marketing of the imported good....