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TMI Blog1991 (6) TMI 148X X X X Extracts X X X X X X X X Extracts X X X X ..... authorities. The Customs authorities appointed a panel of machinery experts consisting of Shri Prabhu Desai, Manager Material BHEL, Bombay, Shri V.K. Shetty, Senior Engineer, Special Steel Ltd., Shri Prabhakar, Engineer, Mahinder Ujain Steel Co. Ltd., Shri Zankar and Shri J.R. Kalkumdri, Engineers, Premier Automobiles for the purpose of ascertaining the correct description, quantity, condition and the assessable value of the goods. The panel of machinery experts examined the goods in the presence of the appellants representative. The experts submitted a report, on the basis of which a show cause notice was issued to the appellants alleging under-invoicing and mis-declaration. On receipt of their reply the Collector exonerated the appellants under Section 111(m) of the Customs Act, but confiscated the goods under Section 111(d) of the Act subject to the payment of a redemption fine of Rs. 6000/- and Rs. 27,000/- respectively. He also enhanced the value on the basis of the report of panel of experts to Rs. 29,667 and Rs. 1,33,335 respectively. 3. The Collector held I find from the records of the case that the goods have been purchased in open auction as such there is no reason to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xpert panel and added freight as per Hindustan Shipping Agency letter. The Collector also added 1 and 1/8th% as insurance charges though the appellants have furnished the actual freight and insurance paid by them. In view of the above the Collector s order is liable to be set aside for violation of principles of natural justice. 5. Shri Prabhat Kumar appearing for the Department submitted that under Section 14(1) of the Customs Act the value of the imported goods shall be 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 buyer have no interest in the business of each other, and the price is the sole consideration for the sale or offer for sale. Since the goods are sold in Government auction it is in the nature of a distress sale. It is not an ordinary sale in the normal course. There is no international trade price, assuming that these are new goods the appellants have not furnished cost and profits of the goods. Since the sale is not a sale in the ordinary course of international trade the price at which the g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ue. 10. Admittedly the imported goods are purchased by the supplier in Government auction and sold them to the appellants. A sale in auction by the Government cannot be treated as a sale in the ordinary course. Therefore, the price does not represent the price under Section 14(1). We may in this context refer to the following conditions of sale in the auction catalogue filed by the appellants. Clause 5 of the conditions of sale reads as follows: The goods remain on the premises at the purchaser s risk from the fall of the hammer and shall be taken with imperfections, damage or error in descrip tion. Purchasers are deemed to have inspected each lot thoroughly prior to the sale and neither the Vendor nor the Auctioneers give warranty or guarantee whatsoever whether as to quality, fitness for purpose or otherwise. From a reading of the above clause it is clear that we cannot draw an inference that the goods are new. 11. The question, therefore, is that if the price at which the goods are imported is not acceptable on the ground that it does not represent the price under Section 14(1) what should be the assessable value. Since the price under Section 14(1) is not ascertainabl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /E description as per lot No. 71 of the auction catalogue with 8 rolls as accessories - Motor Type BSV 691 No. 283338 Vol. No. 220/380 4 PM 9.70 Amp. 11/08 cycle 50 KW 34 parafact 0.85 P.S. 45 E 29. Regarding Item No. II of the B.E. Description as per lot No. 172,173,147,177 and 187 of the auction catalogue lot 187 and 177 are accessories. One control panel found in damaged condition I/O and marking not shown on the machines verified the goods are old and used. No catalogue produced. Para 9 - All the panel experts have given a combined report for both the Bills of Entry i.e. No. 2181 of 7-12-1982 No. 1 and 2. (i) Contents as under :- (a) 4 High Rolling Mill (Cold) with motor, reduction gear box, thickness monitor and other accessories. (b) 3 sets of Gas Fired strip hardening and tempering furnace with acces sories (c) Endothermic Unit Regarding 2 - All the items are old and used (Not reconditioned) Regarding 3 - No. Regarding 4 - Yes. It is part of Rolling Mill Regarding 5 - No. Intermediate annealing and only one nitrogen generator mentioned in Item lc above. Regarding 6 - Not blade manufacturing machinery. Estimated FOB value is as under conditions areas follo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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