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TMI Blog1990 (5) TMI 155X X X X Extracts X X X X X X X X Extracts X X X X ..... ar, provided the contract in question is duly registered with a foreign exchange dealer (Bank) on or before the last date of February of the licensing year.) 3. The appellants entered into purchase contract with a German firm under the agreement dated 18th Dec., 1986. The said contract was registered with State Bank of India under registration No. 0814/88/S/l on 27-2-1988. 4. In pursuance of the above the goods imported arrived at the Bangalore ICD. A bill of entry No. 510188 dated 7th Sept., 1988 was filed. The appellants claimed assessment of the machinery under CTA : 8477.20 read with Notification No. 59/87-Customs dated 1st March, 1987 at 90% Ad val. (45% Basic + 45% Aux.) 5. However, the Asstt. Collector issued a show cause notice dated 28th Sept., 1988 proposing to confiscate the goods and to impose personal penalty. On receipt of the reply the Collector passed the impugned order against which the appeal is filed. 6. The Collector held that whether the contract registered with the bankers could be termed as firm for the purposes of import policy. It is seen that there are numerous proforma invoices right from the date 18th Dec., 86 viz; on 4th Jan, 88; 4th Feb., 1988 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re made available for clearance only on 22nd Dec., 88 on which date Notification No. 250/88-Cus., dated l6th September, 88 was in force. Therefore, appellants are entitled to the benefit of the said notification under which the rate of duty is 35%. In support of the above contention the appellants relied upon Orient Paper Mills v. U.O.I. [AIR 1967 SC 1564) = 1978 (2) E.L.T. (J-328) SC]; CC v. Coromandal Fertilizers [1988 (33) E.L.T. 451 (Tri.) = 1988 (14) ECR 281]; Shewbuxrai Onkarmall v. Asstt. Collector of Customs Others [1981 (8) E.L.T. 298 (Cal.) = 1981 ECR P. 270D (Cal.)]; K.R. Ahmed Shah v.Addl. Collector of Customs [1981 (8) E.L.T. 153 (Mad.) = (1981 ECR ID)]. 8. Mr. Durgayya for the respondents while supporting the order of the Collector submitted that under para 8 of the condition for import of capital goods under OGL the appellants should enter into a firm contract. In the instant case there is no concluded firm contract as para 3 of the agreement providing for terms of payment reads : 100% payable against irrevocable letter of credit to be confirmed by a well known German Bank and to be opened in our favour by end of April 1987 at the latest. The full L/C amount i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on nine hundred forty seven thousand and five hundred and ninety). The price is firm and irrevocable. Packing: wooden cases (seaworthy) or containers. Shipping marks: to be provided by Gurukar Plastics. 3. Terms of payment are: 100% payable against irrevocable Letter of Credit to be confirmed by a well known German bank and to be opened in our favour by end of April 1987 at the latest. The full L/C amount is payable on presentation of shipping documents and performance guarantee amounting to 10% of the sales price. 12. From this document it is clear that there is a contract between the seller and the appellants and it categorically says the price is firm and irrevocable . This contract is registered with SBI on 27th February, 1988. 13. The expression firm contract is nowhere defined. The dictionary meaning of word firm is as follows: Firm Binding, fixed, final, definite (Blacks Law Dictionary (Fifth edition)]. Firm Fixed, settled, or unalterable, as a belief or decree; steady; not fluctuating or falling as prices or the market not subject to change, as a firm offer (New Websters Dictionary Delux Encyclopedia Edition). The pet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bank and to be opened in our favour by end of April, 1987 at the latest . However, this is only a term of payment it does not say that there is no concluded contract unless letter of credit is opened. 18. Therefore, the contention of the respondent that unless L/C is opened, there is no contract can not be accepted. We also observe in the event of failure to open L/C goods will not be shipped as there is no payment, but that does not mean that there is no contract until the L/C is opened. Invoices cannot be treated as a fresh offer as concluded contract has already been executed. Invoices are placed as follow up action or in pursuance of the contract. 19. It is not disputed that the purchase contract is entered into on 18th December, 1986 i.e. prior to 28th Feb. of licensing year, and it was registered with the Foreign Exchange dealer (SBI) before 28th February, 1987. 20. It is true that the Collector referred to condition II(i) of the standard printed conditions attached to the proforma which, according to him, indicates that the contract becomes effective only when the acceptance of the order has been confirmed and until such time the offer of the seller is not binding ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ility of charges like unloading charges, port charges, bonus for quick unloading. 26. In our view these judgments are irrelevant as the facts of the present case are different. On the arrival of goods bill of entry for home consumption was filed and at that stage the goods were not allowed to be cleared for the reason that the authorities were of the view that the goods were imported in violation of conditions of Import Policy and are liable to be confiscated. The goods in accordance with the said view were in fact confiscated and released subject to the payment of redemption fine. The stage of collection of duty has already occurred attracting the provisions of Sec. 15(1) (a) of the Customs Act, 1962. Therefore, the duty is payable in accordance with the provision of Sec. 15(l)(a) of the Act. Therefore, we are in agreement with the view of the Collector. 27. In the light of above we confirm the order of the Collector on different grounds. Consequently the appeal fails, and therefore, dismissed. [Assent per: D.C. Mandal, Member (T) ]. 28. I have perused the order written by Miss S.V. Maruthi, Member (Judicial). I agree with her conclusion that the contract dated 18-12-1986 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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