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TMI Blog1995 (7) TMI 172X X X X Extracts X X X X X X X X Extracts X X X X ..... 46460 CIF. 4. The case was adjudicated by the Collector of Customs, New Delhi. The adjudicating Collector observed that apart from trying to pick holes in the language of the allegations, the importers have not produced any evidence, contrary to the allegations, and that they had not produced any record of their negotiations with the suppliers in support of the substantial reduction of prices. No acceptable reasons were offered for such a reduction. He further observed that in the circumstances of the case, it was the duty of the importers to demonstrate that the price at which they had imported was a fair price, and compared reasonably with identical/similar goods imported by third parties. 5. He came to a finding that the invoice price merited rejection, but held that the correct price for the purpose of Section 14 of the Customs Act, 1962, the nearest ascertainable price which will be consistent with the provisions of Section 14 of the Act and the rules framed thereunder, is US $ 34850 per unit, and not US $ 46460, as alleged in the Show Cause Notice. He, accordingly, did not accept the price of US $ 46460 per unit as alleged in the show cause notice. He fixed the redemptio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... They had not imported the dark room equipment. 13. Regarding the additional evidence it was stated that it came into their hands after the adjudication of the case and that the DRI had only produced a part of the correspondence. 14. The learned Advocate further made the following points :- (1) Importation by Bhavana Creations was not contemporaneous. In this connection, he relied upon the following cases :- 1992 (58) E.L.T. 131 (Tribunal) 1985 (22) E.L.T. 165 (Tribunal) (2) Insurance certificate could be the basis for determining the correct value. In this connection, he relied upon the decision appearing at 1988 (35) E.L.T. 357. (3) Foreign supplier was selling the goods at the same price. He relied upon the decision appearing at 1992 (62) E.L.T. 616. (4) The Collector (Customs) had not discussed their evidence. (5) Correspondence with the suppliers was not kept in their organisation as is done in a Government department. (6) Distributor was not a related person. He relied upon the decision appearing at 1992 (59) E.L.T. 560 (Tri.) = 1992 (39) ECR 19. (7) There was no evidence of extra remittance. In this connection, he relied upon the citations appearing at 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the conclusions drawn by the adjudicating Collector and we reject the miscellaneous application. 22. In fact these letters could hardly be called as additional evidence . In this connection, reference may be made to the Tribunal s decision in the case of C.C.E. v. Bhupinder Steel, 1989 (44) E.L.T. 760 (Tribunal). 23. There is no dispute about the following facts :- (1) No model number was inscribed on the machine; (2) Import documents indicated model number as SG-9J. (3) There were no documents or any other evidence in support of the price. There is also no evidence for the offer of the price of US $ 15,000, said to have been made during the industrial exhibition in November, 1990, held at New Delhi. (4) Price was said to have been fixed on the basis of the verbal discussions with the representative of the suppliers, when he was in India. 24. From the facts and circumstances of the case it appears that the appellants had not approached the foreign supplier as a normal buyer concerned with the purchase of specified goods for a price in an arm s length transaction. For appreciating the true nature of the transaction, the following facts are relevant :- (1) Shri S. Go ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ook at the documents leading to the finalisation of the price, including the relationship between the buyer and seller. 30. In the case before us, the appellants have stated that the negotiations and discussion were taken place verbally and there is no record or documentary evidence. 31. In the Ruchi Associates case also the appellants had pleaded that they entered into a contract over telephone, and whatever prices had been agreed to should be taken to be the transaction value. The Tribunal stated that this could not form the basis for acceptance of the transaction value. They observed that the Valuation Rules cast a responsibility on the appellants to satisfy the authorities that the price has the attributes satisfying the conditions as set out in those rules. They held that where the importer has not laid any basis for acceptance of invoice price as transaction value then the authorities are legally right to proceed to fix the price under the Valuation Rule 5 onwards. 32. We find that the show cause notice contained all the details necessary to allege that the declared prices were not the genuine prices. Thus, while the appellants have not been able to make out a case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erved in that case that there was no cogent evidence on record to prove that there was any special relationship between the appellants and the foreign supplier. 41. In the case before us the appellants company had assured the suppliers that they could give them a good business response, and that they could work in a joint venture and start making machines in India. Further, the suppliers and the appellants entered into an agreement for distributorship of the machine in question in India for a period of 24 months. 42. Thus, for the reasons given by the Collector, Customs, New Delhi, the invoice value has been rightly rejected by him. 43. Similarly, the facts in the case of Mangla Brothers v. Collector, Customs, Bombay, 1984 (15) E.L.T. 151 (Tribunal), relied upon by the Tribunal in the case of Janta Traders, were different. 44. Accordingly, the Tribunal s observations in the case of Janta Traders are of no relevancy to the case before us. 45. The value of the purpose of assessment of duty is a deemed value and need not necessarily be the price agreed upon by the parties, as observed by the Tribunal in the case of Babcock Venkateshwara Hatcheries Pvt. Ltd. v. Collector, Cus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of each case. 52. In the case before us, we find that both the above facts go against the appellants. 53. In the case of Orient Enterprises v. Collector of Customs, 1986 (23) E.L.T. 507 (Tribunal), it had been observed that insurance memos were not helpful in arriving at the assessable value and that no firm conclusions with reference to the valuation of the goods could be arrived at with the aid of insurance memos. 54. In the case - Mirah Dekor v. Collector of Customs, 1988 (35) E.L.T. 357 (Tribunal), the facts were different. The appellants had submitted the sale invoice issued by a Hongkong party. The goods had actually been shipped from Korea. The Hongkong invoice showed the value of US $ 5904. However, the insurance policy recovered during the search of the appellants premises mentioned the value at US $ 8694. The Tribunal in that case had come to a finding that the Hong Kong intermediary had been involved as a camouflage. 55. The goods under consideration were specialised machines for specific uses. They were neither consumer goods nor items which were imported frequently. There were two prices available at the time of import. One price was when M/s. Bhavana Creati ..... X X X X Extracts X X X X X X X X Extracts X X X X
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