9911796707
TMI Blog1988 (10) TMI 141X X X X Extracts X X X X X X X X Extracts X X X X ..... unit price of DM 38.50 per kg CIF of the goods imported by the appellants was found to be lower by about 30% and proceedings therefore, were drawn for adopting the assessable value as DM 56.35 per kg based on the other import. The appellants appealed against the decision of the Assistant Collector ordering the assessment of the goods at DM 56.35 per kg. The Collector of Customs (Appeals), however, did not accept their plea that the lower price charged to the appellants was a special price at arms length and upheld the order of the lower authority. 2. The learned Advocate for the Appellants, pleaded that the appellants and another of their associate company Shree Amarsinhji, manufactured carbon paper and they imported Basonyl blue 636 for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f lots of 100 kgs to 200 kgs. He pleaded in reply to the show cause notice, they had submitted evidence that suppliers were supplying the bulk quantities at lower price. On query from the Bench as to whether the supplier had any International price list or any price list of their product for India showing the base price for bulk purchases and charges schedule or any discount schedule in respect of the purchases made in larger lots, he stated that none was available. He pleaded that in 1985, a similar issue had come up and that the Department sought to assess the duty based on the smaller lots but he pleaded that at that time, the proceedings had been dropped and their invoice value was accepted for the purpose of assessment. He pleaded that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation about the differential price for different lots received by the appellants was a solicited document after the appellants had been questioned about the price. He pleaded that the appellants had not produced the basic documents, indent and the correspondence etc. about how the prices were arrived at. He pleaded that the BASF had the monoply of the product and in respect of the appellants, they were in a better position to dictate their terms and the question of appellants being able to get such a low price by dictating terms would not arise. 4. On a query from the Bench as to how prices moved in previous years, the learned Departmental Representative pointed out that in the price chart supplied by the suppliers, it is seen that the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... usiness. We observe it is well known in the trade that the low prices are charged to the bulk buyers as against to those who buy smaller quantities of goods. It is also a practice in the trade to have a base price and a discount schedule for different lots and the same is made known to buyers through issue of price list or through other means such as through their agents. We find in the present case, no documentary evidence regarding known price chargeable for different lots has been given. The price differential has been sought to be explained by stating that in cases of buyers of smaller lots for despatch and processing of the order etc., higher expenses per kg are incurred. All this information, we observe, has been sent by the suppliers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts has gone up from DM 45.25 per kg to DM 56.35 per kg., the price charged to the appellants for their lots of 1000 kgs and above has come down from DM 46 per kg in 1985 to DM 38.50 per kg in 1987. So far as the factors which according to the appellants that are responsible for the price differential between the larger lots and smaller lots as per the explanation furnished to them by the suppliers are concerned, these have not changed. In view of this, the price difference for the larger lots and the smaller lots in the normal course should have proportionately remained more or less the same. However, the price differential in 1987, has increased from DM 6.5 per kg to DM 17.8 per kg. No explanation has been given for this wide difference. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er. The invoice price for the imports of the appellants therefore, cannot be accepted for purposes of assessment in terms of Section 14 of the Customs Act, 1962. As it is, the appellants have conceded that they got a special price. May it be it is at arms length but this price at arms length need not be accepted as the price for the purpose of assessment has to be in terms of Section 14 of Customs Act, 1962. This section for convenience of reference is reproduced below - 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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