1988 (10) TMI 141 - AT - Customs

Summary

Issues:
- Assessment of goods at a lower price
- Burden of proof on under-valuation charge
- Acceptance of lower price under Section 14 of Customs Act

Assessment of goods at a lower price:
The case involved appeals against the decision of the Collector of Customs (Appeals) Bombay regarding the assessment of imported goods at a lower price compared to previous imports. The appellants imported Besonyl Blue 636 at a unit price lower by about 30% than a previous import. The appellants argued that the lower price was due to a special price at arms length obtained from a USA supplier. They highlighted their history of importing the goods in large quantities and emphasized their ability to bargain for better prices due to their significant buying power. The appellants provided explanations for the price differential, including reasons such as administrative costs, surcharges, and transportation expenses. However, they failed to produce concrete evidence such as published price lists or detailed pricing patterns to support their claims.

Burden of proof on under-valuation charge:
The appellants contended that the burden to prove under-valuation lies with the Department, citing a previous instance where the Department had accepted a lower invoice price. The Department argued that the appellants did not provide essential documents to support their pricing claims and questioned the credibility of the explanations provided. They highlighted the consistency of price movements over the years and raised doubts about the sudden decrease in price in 1987. The Department emphasized the lack of concrete evidence supporting the appellants' claims of obtaining a special price through negotiations.

Acceptance of lower price under Section 14 of Customs Act:
The Tribunal considered whether the lower price charged for the imported goods could be accepted under Section 14 of the Customs Act, 1962. They noted the difference in prices between the goods imported by the appellants in larger quantities and those imported by others in smaller lots. The Tribunal observed that while lower prices for bulk buyers are common in the trade, the appellants failed to provide sufficient documentary evidence to justify the significant price difference. The Tribunal concluded that the appellants' invoice price could not be accepted for assessment purposes under Section 14, as they did not demonstrate that the price was in line with normal international trade practices. Ultimately, the Tribunal partially allowed the appeal, adjusting the assessable value based on the price differential between larger and smaller lots as in 1985.