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TMI Blog1993 (9) TMI 221X X X X Extracts X X X X X X X X Extracts X X X X ..... e notice alleged that the specially discounted price at which the goods had been invoiced could not be deemed as the normal price in the course of international trade. On these grounds and in terms of the provisions of Rule 9(1)(e) it was stated that the declared price was not acceptable as the transaction value in terms of Rule 4 of the Customs Valuation (Determination of Price of Imported Goods) Rules, 1988 and the value of the goods was determinable under Rule 6(b) of Valuation Rules on the basis of the import price of U.S. $ 1.80 per kg. noticed by the department in respect of similar goods. The appellants denied that the price quoted by the suppliers was a special price not available to other importers. They claimed that the declared price represented the value of the goods under Section 14 of the Customs Act, 1962. They also claimed that the imported B-30 and S-30 varieties being inferior were offered by the supplier @ U.S. $ 1.50 per kg. whereas the S-10 variety was priced at U.S. $ 1.80 per kg. They also denied that the value of the goods was determinable under Rule 6(b) of the Valuation Rules. However, by his order dated 8-1-1992 the Assistant Collector rejected the appell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the proviso to sub-rule (2) of Rule 4 warranting the rejection of transaction value were applicable in the appellants case. He stated that Optical glass raw sheets of other shades and varieties covered by the supplier s quotation could not be deemed as identical goods in terms of Rule 5 and even if they were treated as similar goods under Rule 6, the question of applying Rules 5 or 6 could not arise in the appellants case since there was no reason whatsoever for the rejection of the transaction value under Rule 4. He added that U.S. $ 1.50 per kg. was the normal price for the imported varieties of optical glass raw sheets which was available to all importers as confirmed by the certificate of the supplier at page 54 of the appeal paper book. He stated that use of the words to extend market circulation and develop business in India in supplier s letters dated 25-8-1991 and 21-8-1991 clearly implied that the offer of U.S. $ 1.50 per kg. in respect of the goods in question was not available not only to the appellants but to all buyers. He added that the supplier had given cogent reasons for offering these two varieties of optical glass at slightly lower price since he had st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ollector of Customs (iii) 1992 (59) E.L.T. 314 (Tribunal) - East African Traders v. Collector of Customs (iv) 1987 (31) E.L.T. 356 (Bom.) - M/s. Satellite Engineering Ltd. v. UOI Others (v) 1993 (64) E.L.T. 207 (Tribunal) - M/s. Nilinite Corporation v. Collector of Customs (vi) 1992 (62) E.L.T. 760 (Tribunal) - M/s. Padia Sales Corporation v. Collector of Customs (vii) 1993 (63) E.L.T. 263 (Tribunal) - India Infusion Ltd. v. Collector of Customs 5. In his reply Shri Asthana, learned Advocate submitted that the decision of the Tribunal reported in 1993 (62) E.L.T. 760 as confirmed by the Supreme Court in 1993 (66) E.L.T. 35 (S.C.) = 1993 (46) ECR 337 was not applicable to the facts of the case since in that case goods had been offered at specially reduced price and the Trade Representative of USSR had asked the importers not to divulge the specially reduced price to any other party in India. He stated that this was not the position in the appellants case since the supplier had indicated that he wanted to promote sales in India by offering the goods at the price quoted to the appellants. He added that the decisions reported in 1987 (31) E.L.T. 356 is also clearly disti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his letter dated 25th August, 1991 he had clarified that the offer of the two varieties at a reduced price for a limited period was intended to develop business in the Indian market. Under these circumstances we are unable to agree with the respondent that the offer of the supplier in his telex and letter dated 21st August, 1991 to ship the goods in question at a reduced or special price of U.S. $ 1.50 per kg. for a certain period was available only to the appellants and not to any other buyer. 8. In the impugned order the Collector (Appeals) confirmed the Assistant Collector s order in which it was held that the invoice price of U.S. $ 1.50 per kg. in respect of the imported goods was a specially reduced price since from the supplier s quotation in respect of 11 varieties of Optical glass it followed that unit price was same for all varieties irrespective of the shade and percentage of transparency. For these reasons it was held that the declared price did not represent the transaction value under Rule 4 of the Customs Valuation Rules. In this regard it was also stated that in the quotation dated 25th August, 1991 Raw Optical glass having different specifications, colours, tra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in respect of the imported goods in the Bill of Entry on the basis of the invoice price was a negotiated price which was arrived at on the basis of an offer by the supplier and its confirmation by the importers which were followed up by the opening of a letter of credit by the importers in favour of the suppliers. There is no allegation that the importers and supplier are related or any payment in addition to the invoice value has been made by importers to the supplier on account of the imported goods. It is also an admitted fact that there were no contemporaneous imports of identical goods. In this regard we find that in the case of M/s. Vellore Roller Flour Mills Pvt. Ltd. v. Collector of Customs reported in 1991 (56) E.L.T. 659 the Tribunal has held that rejection or the invoice price in the absence of any contemporaneous import of identical goads at a higher price would not be sustainable. In the case of M/s. Mahavir Spinning Mills Ltd. v. Collector of Customs reported in 1992 (61) E.L.T. 730 (Tribunal) the Tribunal has again held that invoice value based on negotiated price and not on proforma invoice, has to form the basis of assessable value in the absence of contemporaneou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nable under Rule 6 on the basis of the price of a contemporaneous import of S. 10 variety of optical raw glass against the Bill of Entry No. 30106, dated 24-9-1991. In this regard we find that similar goods as defined in Rule 2(e)(i) of the Customs Valuation Rules, 1988 are : - Which although not alike in all respects, have like characteristics and like component materials which enable them to perform the same function and to be commercially interchangeable with the goods being valued having regard to the quality reputation and the existence of trade mark . The imported goods being optical raw glass meant for conversion into lenses for sunglasses, it is evident that in respect of such goods shade and transparency would be the factors having vital bearing on their quality and consequently on their demand in the international market. The suppliers in their letter dated 25th August, 1991 while offering the goods at the price of U.S. $ 1.50 per Kg. had stated that B. 30 and S. 30 varieties being of lighter colour were less popular in the Indian market. We find that there was no finding by the Asstt. Collector on the basis of enquiries from the trade or persons dealing in such go ..... X X X X Extracts X X X X X X X X Extracts X X X X
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