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TMI Blog1996 (7) TMI 304X X X X Extracts X X X X X X X X Extracts X X X X ..... ars are as follows :- Appeal No. Quantity Imported in kgs. DeclaredValue per kg. Assessed Value Redemp- tion Fine Penalty Confis- cation U/s. C/3428/90-A 31500 Rs. 5.50 Rs. 10 Rs. 50,000 Rs. 30,000 111 (d) B/E, dated 19-1-1989 C/3439/90-A3 Bills of Entry dated 13-9-1989 15 400 15 400 15 400 Rs. 5.50 CIF Rs. 12 CIF Rs. 45,000 for each consignment Rs. 10,000 for each consignment (d) and (m) of Section 11 3. The impugned orders cover two aspects. One relates to validity of the imports under the REP licences produced by the appellants and the other relates to valuation. 4. The import at Nhava Sheva was claimed under REP licence dated 23-2-1988, relevant export period being May, 1987. The import at Bombay was claimed under REP licence dated 24-2-1988, the relevant export period being September, 1987. Both licences show licensing period as AM 1988 i.e., 1985-88. The licences were transferable as per paragraph 226 of the Policy. Both licences were valid for eighteen months. Shipments in both cases were made before ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ods covered by the licence or amendment thereto, condition applicable to the concerned class of imports, in the Policy Book and Hand Book or any amendment therto and the conditions in sub-clauses 2 and 3 of Clause 5 of the Import (Control) Act, 1955 as amended. Significantly the licencing authority deleted these three conditions but made the licences subject to Clause 5 of the Import (Control) Order, 1955. 8. The licences are REP licences. Appendix 17 of the Policy deals with Import Policy for Registered Exporters. Serial No. G2 (1)(a) Column 4 (d) which, according to the appellants covers poppy seeds reads thus :- Column (1) and (2) Column 4 (d) G2(1)a Fresh fruits, vegetables and flowers Seeds/bulbs/mother plant germ plasm. 9. Paragraph 225 of the Policy reads thus : The REP licences will be issued in the name of the Registered Exporters only and will not be subject to Actual User" conditions, Except for cases covered by paras 195(2), 204, 263(2) and 265(1), a licence-holder may transfer the licence in full or part in favour of any other person. The licence holder on such transfer may import the goods permitted therein but the facility of paragraph 195(2), ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eeds since they are not to be used for regeneration and can be sold as dry fruits. We adopt the broader understanding of the expression seeds occurring in Column 4 following the decision of the High Court of Madras. A single bench of the Tribunal in Mukesh Gopaldas Dattani v. Collector of Customs - 1993 (65) E.L.T. 113 has held that REP licence for seeds would be valid for import of poppy seeds . The entries in Column 4(d) are merely descriptive. There is no restriction that the importer must necessarily be a poppy cultivator or that seeds could be imported only if they are intended to be used for germination purposes. Therefore the fact that poppy cultivation is controlled by the State and no cultivation can be done without a valid licence has no bearing on the controversy. The licences have been issued on the fulfilment of export obligation. Neither the Policy nor the licence contained any condition to the effect that the seeds imported under the REP licence must be used only for replenishment purpose. 12. Condition No. 5 in Appendix 17 bars import of any item appearing in Appendix 2 against REP licence. Since poppy seeds are consumer goods mentioned in Appendix 2 Part B, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the deletion of certain restrictions by the licensing authority. It is not argued before us that the deleted restrictions would, in these cases, operate against the validity of the imports. 15. Turning to the dispute regarding valuation, the imports were in September, 1989. Appellants declared value as Rs. 5.50 per kg. CIF in regard to all the consignments. The value has been loaded to Rs. 10/- per kg. CIF regarding the import at Nhava Sheva and to Rs. 12/- per kg. CIF regarding the import at Bombay. According to the appellants, the adjudicating authority was in error in purporting to adopt the prices in International trade at the time of import, that is, September, 1989 or even in July, 1989 and ought to have considered the prices in international trade at the time of the contract, namely, November, 1988 and in any event, valuation at Rs. 12/- per kg. by the authority at Bombay was not justified in view of the value of Rs. 10/- per kg. adopted by the authority at Nhava Sheva. 16. According to the appellants, the contract was evidenced by telex confirmation by the supplier of the sale of five containers consisting of eighty tons of poppy seeds at Rs. 5.50 per kg. out of whic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was kept alive till the end of August, 1989 on consent of parties by extending the period of Letter of Credit in the first instance and after its expiry by opening new Letter of Credit and it must be accepted that the goods were shipped in pursuance of the original contract and the value of Rs. 5.50 per kg. must be regarded as the genuine transaction value. Learned Counsel sought to rely on certain decisions. 19. In Kishco Cutlery Ltd. and Another v. Union of India - 1984 (15) E.L.T. 367 (Bom.) it was held that when a contract was followed by an order by the importer, issue of proforma invoice by the supplier as also subsequently by suppliers confirmation of the price and advance licence was obtained on the strength of the proforma invoice, the confirmation of price did not amount to a fresh contract and the price prevalent at the time of shipment of goods could not be the basis for assessment of value and price agreed to in the contract should be accepted. The facts of the above have no comparison with the facts of the present case and the question arising in the present case did not arise for consideration in the above case and therefore the decision is of no assistance. 20. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the petitioner entered into a contract on 16-9-1987 for import of 1000 MT of Zinc Ingots at US $ 750 PMT CIF Calcutta, 200 MT was shipped in October/November, 1987 and the same were cleared. Meanwhile international price of the goods started increasing and the supplier withheld shipment of the balance quantity and after protracted correspondence, agree to ship the same at price enhanced by US $ 25 PMT. In May, 1988, the supplier shipped 235.826 MT at US $ 775 per MT CIF. The Collector determined the value at US $ 1075 PMT CIF. The goods were confiscated, allowing redemption on payment of Rs. 5 lakhs. The Collector was of the view that a prudent supplier would not ship the goods at price which was 30% to 40% lower than the prevailing international price, that the period of supply under the contract was too long and payment was to be made not by Letter of Credit but after the goods were shipped and therefore the contract had no sanctity and the transaction was a manipulated one. The High Court held against the conclusion as well as the reasoning of the Collector. The High Court held that the contract was in usual and normal course of business, the goods were shipped under the contrac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the stipulated date of shipment. The new Letter of Credit cannot be said to have been opened in pursuance of the alleged original contract. In these circumstances the alleged original contract cannot be said to have been kept alive till the date of actual shipment. Hence the price of Rs. 5.50 per kg. CIF agreed between the parties cannot be said to be the price at which the goods were sold or offered for sale at the time of actual importation. The conduct of either party was such that neither of them could have enforced any legal claim against the other and the subsequent actions of opening new Letter of Credit and actual shipment cannot be said to be the consequence of adjustment of terms of the original contract or law reflection of mercantile law and practice. The decision in Cadbury Fry (India) Private Limited. - 1990 (46) E.L.T. 7 (Bom.) is clearly distinguishable on facts. We therefore reject the contention that the actual shipment was made under the terms of the alleged original contract and that Rs. 5.50 per kg. CIF Calcutta was the real transaction value or contractual price. Necessarily the ordinary price in international trade of goods sold or offered for sale at the ti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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