1995 (10) TMI 93 - AT - Customs

Summary

Issues Involved:

1. Whether the price of DM 736.360 C & F Bombay was inclusive of interest for 180 days credit.
2. Whether the quantity discount claimed by the appellants was admissible to them at a lower rate.
3. Whether the freight chargeable for chartered vessel is less than the normal liner vessel and if so to what extent this deduction should be permitted when the freight has not been shown separately.

Detailed Analysis:

1. Whether the price of DM 736.360 C & F Bombay was inclusive of interest for 180 days credit:

The appellants contended that the price of DM 870 PMT for M/s. Jindal Pipes Ltd. was inclusive of interest for 180 days credit, whereas their invoice price was exclusive of this interest. They supported their claim with a separate invoice indicating that interest at a rate of 20% per annum for 180 days was chargeable. The Tribunal found that there was a separate invoice indicating that interest can be chargeable at a rate of 20% p.a. for credit of 180 days. Therefore, it was determined that the invoice value of DM 736.360 was not inclusive of interest. Consequently, for comparison purposes, any price inclusive of interest must allow for the reduction of interest if included in the invoice value of the imported goods.

2. Whether the quantity discount claimed by the appellants was admissible to them at a lower rate:

The appellants argued that they were entitled to a quantity discount of 2-1/2% on the purchase of 10,000 MT, citing that bulk quantity discount is a normal trade practice. The Department acknowledged that quantity discount on bulk purchase is generally a normal practice but contended that the discount was not indicated in the invoice, allowing only 1%. The Tribunal observed that it was an admitted position that quantity discount was permissible on bulk purchase. The dispute was about the percentage or quantum of this discount. The appellants referred to several invoices indicating that the invoice value was DM 735/- PMT, C & F, Kandla, which the lower authorities dismissed due to lack of evidence that this value was accepted by Customs. However, the Tribunal held that the appellants were eligible for a quantity discount of 2-1/2% on the purchase of 10,000 PMT, considering the overall circumstances and the prevailing price for identical goods.

3. Whether the freight chargeable for chartered vessel is less than the normal liner vessel and if so to what extent this deduction should be permitted when the freight has not been shown separately:

The appellants claimed that freight for chartered vessels is less than for normal liner vessels and produced a letter from M/s. Parekh Marine Agency indicating a reduction in freight by US $ 10 PMT for cargo over 5000 MT. The lower authorities, after enquiry with the State Trading Corporation (STC), confirmed that freight chargeable by chartered vessel is less and allowed a reduction of DM 31 PMT. The Tribunal found no reason to disagree with the STC's information, as it was not an interested party. The Tribunal also noted that the appellants had produced supporting evidence from M/s. Parekh Marine Agency. Consequently, the Tribunal agreed with the reduction in freight to the extent of DM 31 PMT for chartered vessels.

Conclusion:

The Tribunal found that there was no justification to enhance the invoice value from DM 736.360 PMT C & F Bombay to DM 775/- PMT. The appeal was allowed, and the impugned order was set aside, with consequential relief to be provided to the appellants in accordance with the law.