1982 (12) TMI 196 - AT - Customs

Summary

Issues:
1. Interpretation of a contract for the sale of soda ash.
2. Transfer of contract rights and importation by assignees.
3. Assessment of goods at contract price under Customs Act.
4. Requirement of original contract and related documents for assessment.

Analysis:
1. The appeal involved the interpretation of a contract for the sale of soda ash between Chemi Imports and M/s. Hira Lall & Sons, including specific conditions regarding price adjustments based on freight rate and market price changes. The contract was confirmed by both parties, and a letter of credit was opened for the shipment of 1600 MT of soda ash on behalf of M/s. Hira Lall & Sons.

2. The appellants claimed that the contract for 1600 MT of soda ash was transferred to them by Hira Lall & Sons, and the importation was made as assignees of the original contract. The Department argued that since the price of the goods had risen to US $190 per MT, a separate contract should have been signed for the appellants' import, leading to a higher assessable value under the Customs Act.

3. The Department acknowledged the absence of evidence of under-invoicing or improper dealings but contended that the goods should be assessed at the prevailing market price of US $190 per MT. However, the Tribunal held that the contract price of US $174 per MT had to be accepted for assessment under Section 14 of the Customs Act, as all material terms of the original contract were adhered to.

4. The Tribunal ordered the setting aside of the previous order and directed the appellants to produce the original contract between Hira Lall & Sons and Chemi Imports, along with other relevant documents, for verification by the Assistant Collector of Customs. The inspection of these documents was deemed necessary before final assessment and granting relief to the appellants, ensuring the genuineness and authenticity of the import transaction.

This detailed analysis highlights the key legal issues, arguments presented by both parties, and the Tribunal's decision regarding the interpretation of the contract and the assessment of goods under the Customs Act, emphasizing the importance of verifying the original contract and related documents for accurate assessment.