9911796707
TMI Blog1993 (7) TMI 200X X X X Extracts X X X X X X X X Extracts X X X X ..... ear of manufacture of the machine being 1976, and the expected residual life being 10 to 15 years. The value of the machine was declared in the Bill of Entry as SEK 350,000 (Rs. 4,96,306/-) cif. This however, was suspected to be a case of under-valuation as, for contemporary import for the such machine, of 1974 manufacture, the value was quted at SEK 375,000/- by the importers M/s. Jay Print Puck Ltd., New Delhi and it was felt that therefore the subject machine ought to be at least worth SEK 400,000/- i.e. Rs. 5,62,983/-. It was also noticed that the goods were received during the policy period AM 1983-84, when such machines were not falling within the category of OGL items. On enquiry, it was revealed that the appellants had opened the Letter of Credit, with the Bank on 9-12-1982, which was initially valid upto 8-3-1983 but subsequently the validity period was extended to 8-4-1983, 30-6-1983 and 31-3-1984 and hence it was felt that, with the fundamental change effected in the contract , the import was unauthorised and the benefit of Condition 7 of Appx. 10 of AM 1982-83 which was being claimed by the appellants, was not available, and further, no reasonable explanation was also a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lid upto 8-3-1983. The contract between the parties was also registered with the said Bank on 9-12-1982, however, as the delivery of the machine could not be effected within the stipulated period, the validity date of Letter of Credit was got extended thrice, and was made valid till 31-3-1984. As is pleaded by the Ld. Consultant, because the supplier was not effecting delivery Mr. M. Bhargava, of the appellants, went to Sweden in January 1984, and that because, by that time, the machine negotiated for import was further used, he negotiated for reduction in price, which ultimately was agreed at SEK 350,000/- CIF and the suppliers confirmed the same vide their letter dated 3-2-1984 and ultimately the machine was shipped on 27-3-1984 and invoice showing the price as SEK 350,000/- dt. 29-3-1984 was issued, and the Bill of Entry for home consumption was filed on 26-6-1984. 3.2 Submitting on the valuation aspect, the Ld. Consultant, has pleaded that the authority below has proceeded on the wrong premises and has overlooked the fact that the value of the second-hand machine is always related to the condition of the machine, and that the price of the machine as originally agreed to was r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or, 1985 (21) E.L.T. 140 (Tribunal), the Ld. Consultant has pleaded that mere change in date would not alter the nature of firm contract. He has also pleaded that the same machine, which was agreed to be purchased in 1982, has been received. About the delayed shipment, and observation of the adjudicating authority in that regards, the Ld. Consultant, has pleaded that extended period of shipment cannot be denied because there was delay on the part of the supplier as there is nothing in condition 7 of Appx. 10 of Policy Book AM 1982-83 to conclude that the delay should be only on account of shipping difficulty. In his submission, with firm contract entered into as early as 14-10-1992, and with other requirements of the aforementioned condition 7 having been complied with, the benefit thereunder is available to the appellants, and that the import under OGL as per the Policy provisions of AM 1982-83 be permitted. 3.4 Mr. Prabhat Kumar, the Ld. SDR, while supporting the entire order of the authority below, has submitted that four aspects are required to be considered, namely, (i) date of firm contract, (ii) legality of import from ITC angle, (iii) aluation, (iv) ustification for confi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Tribunal in Padia Sales Corp v. Collector - 1993 (62) E.L.T. 760 (Tribunal) and Padia Sales Corpn v. Collector - 1993 (66) E.L.T. 35 (SC) = 1993 (46) ECR 377 (SC), Mani and Press Tools Corpn. v. Collector - 1990 (45) E.L.T. 328 (Tri.) = 1990 (31) ECR 601 (Tribunal), Merinoply Chemicals v. Collector - 1988 (35) E.L.T. 654 (Tribunal) and Wavin India Ltd. v. Collector - 1992 (59) E.L.T. 456 (Tribunal). 3.7 The Ld. SDR has submitted that therefore, the impugned order of confiscation, based on contravention of the ITC provision as also on undervaluatuon of the goods, is fully justified and does not call for any interference. 4. Considering the submissions made, and going through the records, there does not appear any dispute on the issue that during the policy period AM 1982-83, the subject goods could be imported under open general licence, and that the appellants are the actual users of the said machine. There is also no challenge over the fact that during the subsequent policy period, when the actual import has taken place, the subject goods have been taken out of the OGL items and hence could not be imported without a valid licence in that regard, and to prove the subj ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the proforma invoice as registered with the bank on 9-12-1982 as a valid document of contract, the same is for the purchase of machine for SEK 440,000 CIF Bombay, and time for delivery stipulated therein is 6-8 weeks after receipt of letter of credit. Obviously, the import is not effected under these conditions. For the subject import, a fresh invoice though bearing the same number as the earlier proforma invoice, has been drawn on 29-3-1984, showing the price as SEK 350,000/-. 5.3 Firm Contract as to be understood with reference to the Policy provision, is the one which cannot be subjected to any subsequent alteration and in due implementation whereof, the import is effected. In such of the contracts, where time of performance is not one of the essential criteria, alteration thereof, on mutual agreement, may not make the contract, which otherwise adheres to the original terms and conditions agreed upon, is not a firm contract, merely on alteration of the date of delivery. Here, however, besides alteration in the date of delivery, there is also material alteration in the price payable. In a contract of sale, price is positively an essential ingredient, and if that is altered ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to accept the plea that the import of the subject goods stands protected vide Condition (7) of Appx. 10 of the Policy Book AM 1982-83 and consequently the import has to be held as unauthorised, and the authority below has rightly held the same to be so. 5.8 It may however be observed that the view of the authority below that extended period of delivery is available only in case of Shipping difficulty, does not appear as flowing from the relevant provisions. The words longer delivery period would also include delivery of goods even by the supplier. This aspect however has no significant bearing on the conclusion drawn as above. 5.9 The case law referred to by the Ld. Consultant in this regard, is factually at variance with the facts here. In Re : Rakesh Press (supra), there was no alteration in the terms of contract and there was only delayed delivery whereas in Re : Tara Art Printers (supra), it was only alteration in letter of credit and not in the main terms of contract. 6.1 As regards the proper valuation, the valuation as put by the appellants is sought to be doubted on two aspects (i) contemporary import of similar machine of 1974 make for SEK 375,000 and (ii) this ve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w machine had been going upward, and was SEK 960,000/- when the subject machine was imported, being a second-hand machine used for seven years, nearly 36% of the value of the new machine of 1982 manufacture and nearly 63% of the price prevailing in 1976, when the same was manufactured, has to be, in absence of any other specific data available, showing the contrary, has to be accepted as fair and reasonable, and need not be doubted as the case of undervaluation. The decisions relied upon by the Ld. SDR also do not give any contrary version. 6.4 With no clear data available before the department that the value as assessed is not proper, and when the other evidence on record indicates the value to be fair and reasonable the finding of the adjudicating authority that the subject goods have been undervalued cannot be endorsed, and as such, the said portion of the order of the authority below cannot be sustained and has to be set aside. 7. Thus, though this is not a case of undervaluation, from the ITC angle, the import is unauthorised, and has been rightly ordered confiscation vide Section 111(d) of the Customs Act. 8. While ordering confiscation of the goods, the authority below ..... X X X X Extracts X X X X X X X X Extracts X X X X
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