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TMI Blog1991 (3) TMI 229X X X X Extracts X X X X X X X X Extracts X X X X ..... tively. It is also proposed to confiscate the goods under Section 111(d) of the Customs Act, 1962. The proceedings were initiated on the basis of Hungarian manufacturers price list No. 830228 issued in 1983. On receipt of the reply the Collector accepted the invoice price of the bearings and dropped the proceedings against which the appeal is filed. 3. The Collector accepted the invoice price on the following grounds: a) The invoice price is based on the price list No. 840216 dated 16th February, 1984 published by the manufacturers and attested by Second Secretary, Embassy of India, Budapest on 6th March, 1987. The said price list i.e. No. 840216 was certified to be in force by the manufacturers by their letter No. 21/637/87 dated 4th March, 1987. M/s. Metal Impex wrote a letter No. 41/617/1904 requesting the Embassy of Hungarian Peoples Republic in New Delhi to send the price list No. 840216 dated 16th February, 1984 to the Collector for 1984 shipment to India. He also found that no price list was issued in 1983 bearing No. 830228. He also found that after 1981 they published price list only in 1984. 4. He accepted the invoice price list as suppliers were Government body, a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otice was issued proposing to enhance the value and confiscate the goods under Section III(d) of the Customs Act, 1962. On receipt of the reply, the Collector accepted the invoice price rejecting the appellants contention against which the present appeal is filed. 9. The Collector in support of his order in addition to the reasons mentioned in paragraphs 4 5 (supra) gave the following reasons. The deptt. has not been able to cite a single import of F.L.T. make bearings of polish origin indicating higher prices. The deptt. while adopting the price list of 1979 and reducing it by 25% presumed that the prices of 1979 continued to be same even in the case of import made in 1984. He also relied on the letter No. PN/84, dated 11th April, 1984 from the consulate of Polish People Republic in Bombay addressed to the Collector of Customs, Bombay, signed by Vice counsel Sh. Keralock wherein prices of 18 types of bearings were given and also certified that their agent in Bombay have booked the said types of F.L.T. bearings of polish make at those prices. It was also mentioned that over and above those prices 10% discount was given if letter of credit exceeded US $ 10,000/-. 10. The resp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment Issued in 1984 Indo-Romanian Trade Plan Provision . List attached to the said import licence includes bearings of 6200 series and prices are also shown against these bearings. These prices are as per 1985 price list price. P.E.C. is a Government of India undertaking similar in character to STC. 13. He rejected the quotations and also the cost structure on the ground that the cost structure by indigenous manufacturers is not sound. He further observed the calculation given by the Ball Association is itself quite fictitious. He referred to a photocopy of Bill of Entry No. 598/75, dated 14th October, 1986 wherein Calcutta Custom House accepted the invoice prices. Holding as above the Collector accepted the invoice prices and dropped the proceedings. 14. Challenging the above orders of the Collector it is submitted by the DR that the order of the Collector is ab initio void as it is in violation of principles of natural justice. Elaborating his arguments it is submitted that Ball and Roller Bearings Association of India gave a complaint on 21st January, 1984, and, on 21st June, 1985 to the Member, Customs, stating that the respondents are indulging in importing ball bearings ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ustice. It is also submitted by Sh. Sunder Rajan that the deptt. is entitled for a reasonable opportunity to prove their case. 15. It is next contended that the elements constituting for the purpose of charging customs duty are the price in the course of international trade where the seller and the buyers have no interest in the business of each other and the price is the sole consideration for the sale or offer for the sale. The price for bearings imported, it is submitted, have been influenced by the consideration of enabling the importers to import a larger quantity of bearings against the same import licence, in view of very restricted import policy in respect of these types of bearings during 1984 to 1985 policy. Therefore, the price, is not the sole consideration for sale or offer for sale and it cannot be said that the seller and the buyer have no interest in the business of each other. He further submitted that the price is influenced by the restricted import policy and therefore it is not the price at which the goods are ordinarily sold. The quotations seized from the premises of M/s. Amit Sales Corpn. indicate higher prices and international prices of bearings during th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... DM 1 = Rs. 4.10 Rs. Appx. Prices to India in 1984 (Rs.) 6200-ZZ 1.64 6.72 2.02 6201-ZZ 1.72 7.05 2.15 6201-2RS 2.04 8.36 2.42 6202-2RS 2.53 10.37 2.66 6203-ZZ 2.14 8.77 2.55 6204-2RS 2.80 11.48 5.43 6206-2RS 4.19 17.20 4.17 6208-2RS 6.62 27.15 8.04 6300-ZZ 2.14 8.75 - 6305-ZZ 3.89 15.95 4.03 6306-2RS 6.10 25.00 5.89 6308-ZZ 9.10 37.30 10.16 17.2. He submitted that the above chart indicated the price much higher than the prices indicated in the 1984 price list and even higher than the prices indicated in 1982 price-list. He relied on the prices of certain ball bearings of Romanian origin procured by the President of Ball Roller Bearings Manufacturers of India indicating Romanian export price for 1985 to West Germany, U.K., and Singapore. Symbol Price in DM Rs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... omania sold the ball bearings to the Indian importers. 18. Mr. Sunder Rajan also contended that the cost of the raw material is on the increase. Therefore, the price of the end product should simultaneously be increased On the other hand the imports in dispute have shown a decrease in price. He relied on the following chart to compare the cost of raw material and production cost of certain ball bearings of Romanian origin for the period 1982, 1983 and 1984. Bearing Type 1982 1983 1984 For finished bearins appr. 1984 c.i.f. Prices for import in India Rs. Rs. Rs. Rs. 6204 2.41 2.61 2.79 2.79 6205 3.03 3.26 3.47 2.96 6206 4.17 4.67 4.87 3.72 6207 5.34 5.71 6.12 5.86 6208 6.96 7.54 8.04 6.72 6303 2.55 2.77 2.98 2.64 6304 3.32 3.63 3.86 3.15 6305 5.12 5.54 5.90 3.97 6307 8.31 9.05 9.72 7.15 6306 6.62 6.98 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at all as to how to arrive at the finding that since the cost of raw material has increased the cost of bearing should also increase. 21. It is next contended that the cost of manufacture of bearings by the local manufacturers cannot form the basis of the assessable value of the imported goods. 22. Mr. Krishnamurthy appearing on behalf of the 3 respondents while adopting the arguments of Mr. Kantawala, in addition submitted that before invoking Rule 8 of Customs Valuation Rules the appellants should first exhaust the other rules without which Rule 8 cannot be invoked. 23. Mr. Jain appearing on behalf of the M/s. R.N. Agarwal Co. and Continental Eastern Agencies while adopting the arguments of Mr. Kantawala submitted that they have imported bearings No. 6305, 6201. The importation has taken place under the indent of Pradeep Trading Corporation. The delegation from Romania accredited the Pradeep Trading Corpn. as one of their agent. He also submitted that the telex to M/s. Amit Sales Corpn. is not relevant as number of bearings are different. Similarly, the representation by the association is not relevant as number of bearings is different. He also submitted technocrat impor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Jam Nagar Export matter in the proceedings relating to Bombay Export matter it was contended that the order of the Collector is vitiated. Accepting the contention it was observed that we have already pointed out how there is no credible material to show that any decision was taken to amalgamate the two matters for adjudication. Having become functus officio in respect of Jam Nagar matter the learned Collector of Customs could not have made any use of evidence produced and arguments advanced in Jam Nagar matter for a decision of the Bombay matter. In that context this Tribunal held that the order of the Collector does not inspire confident and does not confirm to equity justice and goods consign. It was also held that Revenue did not have proper opportunity to substantiate its case. The facts of that case are entirely different from the facts of the present case. In the instant case on the basis of the complaint by Ball Bearings Mfg. Association an inquiry was made, searches were conducted, documents were seized. Some of the documents i.e. telex message quoting the price to M/s. Amit Sales Corpn. and also quotations furnished by the Ball Bearing Manufacturers Association i.e. Tec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... est in the business of each other and the price is not the sole consideration for the sale or offer for sale. It is also equally settled that the burden of proving the charge of undervaluation lies squarely on the deptt. The charge of under-invoicing has to be supported by an evidence of right kind of goods [Maheshwari Trading Corpn. v. CC, New Delhi - 1987 (29) E.L.T. 739 (Tri) = 1985 ECR 973]; Walia Enterprises, Amritsar v. Collector of Customs [1987 (32) E.L.T. 774]; CC v. Automotive International [1989 (44) E.L.T. 325]; Orient Enterprises v. CC, Cochin [1986 (23) E.L.T. 507]. It is also equally settled that in the absence of evidence of contemporaneous import of like kind of goods at higher prices the invoice price should be the basis for the assessable value under Section 14. 29. Let us now examine the charge of undervaluation and the material in support of the same and whether the appellants have proved undervaluation on the basis of the evidence available with them. The charge of undervaluation is based on, (1) quotations (telex message to Amit Sales Corpn. seized during the search of premises of Amit Sales Corpn.). These quotations are a telex message dated 30th January, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... offered to Singapore, West Germany, U.K. are relevant as international trade means multinational trade and not bilateral trade is in our view devoid of any merit. The language used in Section 14 is price at which goods are ordinarily sold for the delivery at the time and place of importation .....in the course of international trade. The expression international trade is to be read in the context of time and place of importation. The word import is defined under Sec. 2(23) in the following manner : 2(23) : Import with its grammatical variation and cognate expression, means bringing into India from a place outside India. 33. So read international trade means bringing from a foreign country into the territory of India. A trade between India and foreign country is international trade but not intranational trade. The word intranational trade is used in contra-distinction with intranational trade. So understood, the prices quoted in the quotation referred to above apart from the reasons given above are irrelevant. This Tribunal [Manga Bros. v. CC reported in 1984 (15) E.L.T. page 151], under more or less similar circumstances held that the letter of US firm showing prices of ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent case also there is no evidence on record to show that the dealings between the suppliers and the importers are not at arms length. There is also no evidence to establish that the price at which the goods are ordinarily sold is higher. The contention that invoice price is influenced by the restricted import policy, and therefore, the price is influenced by extra commercial consideration is devoid of any merit. The import policy will certainly have a bearing on the import and exports to be made into India and out of India. The nature of the import policy cannot be treated as an extra commercial consideration and the price at which the goods are imported for that reason cannot be treated as not the sole consideration for the sale. 34.1. In our view in the absence of evidence that the respondent remitted to the foreign supplier more than what is indicated in the invoices, or that there are contemporaneous sale at higher price or that the sellers and buyers are interested in the business of each other, the nature of the import policy cannot be treated to be an extra commercial consideration to discard the invoice price. 35. The arguments of Shri Sunder Rajan relying on various p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alue of the goods as declared in the invoice is not acceptable under Section 14(1)(a) of the Customs Act, 1962. The value of the goods has arrived under Rule of Customs Valuation Rules 1963 read with Section 14(1)(b) of the Customs Act, 1962 as shown in Annexure A the prices for the purposes of valuation under Section 14(1)(b) are taken as per 1983 price list for Hungary bearings. Whereas in the appeal the proposal is to enhance the value of the imported goods, on the basis of 1981 price list. The relevant portion of the appeal reads as follows : The assessable value of the goods should have been determined on the basis of the manufacturer s 1981 price list. In our opinion the appellants cannot be permitted to set up a new case at the appeal stage. Therefore, we accept the finding of the Collector that the invoice price should be accepted in respect of the imports from Hungary. 38A. We agree with Mr. Kantawala that there is no material to prove that in fact there is increase in the cost of raw material, and therefore, the cost of bearings should also be increased. We also agree with him that it depends on various factors in the absence of which we cannot accept the conte ..... X X X X Extracts X X X X X X X X Extracts X X X X
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