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TMI Blog1999 (10) TMI 252X X X X Extracts X X X X X X X X Extracts X X X X ..... n-original dated 14-11-1998 discarded the invoice value and enhanced the same to US $ 88,235/-. He was also of the view that the discount 40% shown in the price list was not available to the appellant, but however, he allowed discount to 18% based upon the earlier price list dated 3-4-1998. Accordingly, he ordered for confiscation of the genset under Section 111(m). However, redemption fine of Rs. 2 lakhs was imposed for redeeming the goods in lieu of confiscation. He also imposed a penalty of Rs. 20,000/- on M/s Viking Power (P) Ltd. under Section 112 (a). 3. At the outset, Shri V. Sridharan, learned Advocate appearing for the appellants submitted that without going into various controversies in this appeal the matter can be disposed of on applying the provisions of Rule 7 of the Customs Valuation Rules. Rule 7 of the Customs Valuation Rules, l988 is as under :- Deductive value - (1) Subject to the provisions of Rule 3 of these rules, if the goods being valued or identical or similar imported goods are sold in India, in the condition as imported at or about the time at which the declaration for determination of value is presented, the value of imported goods shall be based on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... applicable, ignoring the important phrase i.e. the goods being valued . He submits that Rule 7(1) is clearly applicable to the facts of this case since the goods being valued are sold in India in the conditions as imported. In fact, it is clear from the record that the appellants have imported two gensets Model 760 P5 to fulfil the contractual obligation to M/s B.L. Kashyap and Sons Ltd., for supply of the items and accordingly two nos. of diesel gensets were sold for a total sum of Rs. 59,80,000/-. 5. Shri Prabhat Kumar, learned SDR countering the arguments submitted that Rule 7 cannot be read in an isolated manner and all the factors are to be taken into consideration while applying the provisions of Rule 7 therein. He said that neither transaction value is genuine nor the very goods are sold in India and in view of various discrepancies the transaction value under Rule 4 of the Valuation Rules is ruled out and question of applying Rule 7 does not arise as it was properly analysed by the Commissioner in the impugned order. 6. While justifying the action of the Commissioner in disallowing 40% discount on the ground that the price list neither indicates the nature of discount ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e was no special relationship between the supplier and the importer. The appellants are distributors, and distributors are a separate and different class of buyers. In fact the appellants are one of the distributors in India and as a matter of policy, all the distributors in India are given discount of 40%. M/s. Laxmi Gensets are also distributors of M/s. Kohler s Gensets and they are given same treatment. They also buy the same goods at same price. He said that special discount is only nomenclature and that should not be mistaken as if it is available to only one person. Referring to the letter written by M/s Kohler addressed to Customs Madras, he said that distributors all over the world will get 40% discount from the published last price and in view of the competitive market in India, distributor in India will get over and above the 40% discount i.e. 11% addition discount. He referred to the decision of the Supreme Court in the case of M/s. Mirah Exports Pvt. Ltd. v. Collector of Customs reported in 1998 (98) E.L.T. 3 (S.C.) wherein it was held that it is not unusual for a foreign supplier to give a higher discount to an importer merely such a discount has been given by the supp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urse of international trade, where the seller and the buyer have no interest in the business of each other and the price is the sole consideration for the sale or offer for sale. Provided that such price shall be calculated with reference to the rate of exchange as in force on the date on which a bill of entry is presented under Section 46, or a shipping bill or bill of export, as the case may be, is presented under Section 50. (1A) Subject to the provisions of sub-section (1), the price referred to in that sub-section in respect of imported goods shall be determined in accordance with the rules made in this behalf. 11. The legal position is well settled that the burden lies upon the Revenue to prove undervaluation. In the case of Mirah Exports Pvt. Ltd., (Supra) the Apex Court held that ordinarily the Court should proceed on the basis that the apparent tenor of the agreements reflect the real state of affairs" and what is to be examined is whether the Revenue has succeeded in showing that the apparent is not the real and that the price shown in the invoices does not reflect the true sale price . In terms of Section 14(i) of the Act to reject the transaction value either the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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