9911796707
TMI Blog1999 (5) TMI 373X X X X Extracts X X X X X X X X Extracts X X X X ..... by order dated 30-4-1991 by which the duty demand at the rate revised by the Collector (but not quantified) was confirmed and the penalty of Rs. 10 lakhs imposed. The penalty amount was fixed after taking into account the redemption fine. 5. Brief facts are that the appellants were a trading company dealing in various raw materials and other goods including H.D.P.E. According to appellants, for purposes of availing the advantage of bulk buying and consequent bargaining strength, the appellants and many other importers of plastic raw materials had been placing their orders with M/s. Milton Trading Corporation (MTC) of Bombay who had considerable experience and expertise in the procurement of such raw materials from foreign suppliers. In early January, 1987 appellants had requested MTC to book for them 500 M.T. of H.D.P.E. Grade BA 550-13 of Hungarian Origin to be shipped in two lots of 250 M.T. each. MTC had also at the material time placed orders with the Hungarian supplier for other plastic materials on behalf of certain other Indian buyers. Pursuant to this, M/s. Chemolimpex of Hungary, the supplier, issued a contract/proforma invoice dated 27-1-1987. On the basis of the said p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w. Further examination of documents revealed that the Importers had opened L/C with suppliers on 10-11-1987 and the contract of M/s. MTC dated 27-1-1987 could not be connected with the disputed import. Further, though the master contract , of MTC dated 27-1-1987 with the suppliers showed the price at US $ 590/- per M.T. CIF Bombay, at the time of actual import the price was more than double. The price mentioned in the contract was the one prevailing in February, 1987 and no revision of price had been effected at the time of opening of L/C for extending the period of shipment. The exceptionally low price of the goods did not have any nexus with the time of importation. Therefore, the Collector came to the conclusion that the contract between MTC and the foreign supplier cannot be treated as the basis for valuation under Section 14 (1) (a) of the Customs Act, 1962. The Collector also found that import of identical goods at Bombay Port at the corresponding period showed a much higher price ranging from US $ 1150 to 1300/- per M.T. as referred to in the show cause notice. The Collector therefore held that the goods had been undervalued to the extent of Rs. 18,34,862/- with a view to e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were ready for shipment appellants had opened L/C on 10-11-1987 with the condition that actual shipment would be made not later than 30-11-1987. However, shipment had to be extended to 31-1-1988 for reasons beyond the control of the appellants. Ld. Counsel submitted that on these facts the Collector had taken the erroneous view that since there was no explanation given by the appellants as to why the suppliers agreed to stick to the original price in spite of considerable increase in the international price, the Department was not bound to accept the lesser contracted price claimed by the appellants as per the Proforma Invoice. On reliance placed by the Collector on the Tribunal decision reported in [1983 (12) E.L.T. 364] to hold that where the price of the goods went up, customs duty was liable to be increased on the basis of increased price on the date of import, ld. Counsel submitted that in the said case the earlier contract was not acted and the fresh contract at the old price for a part of the import and the balance at the prevailing price was not accepted by the Tribunal as the lower price was a concession extended by the foreign supplier as a gesture of goodwill. In such ci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such as date of shipment, date of delivery etc. It is also not in dispute that there was a gap of well over one year between the date of the Proforma Invoice (27 January, 1987) and the dates of Bills of Entry presented for clearance of the goods (B/E No. 1304, dated 15-3-1988, B/E No. 1574, dated 31-3-1988 and B/E No. 2373, dated 17-5-1988). The difference in price between the proforma invoice price and contemporaneous imports of same goods at Bombay by other importers is also not in dispute. Quotations are normally in the nature of an offer. It is subject to further negotiations resulting in a concluded contract. However, where there is no evidence of any further negotiation resulting in a concluded contract, but there is evidence of the importer showing the proforma invoice price as the actual price in the Bill of Entry prima facie that price would be the basis for arriving at the assessable value. However, where there is a considerable gap of time between the date of the Proforma Invoice and the date of importation and it is shown on the basis of contemporaneous imports of same goods that there was a considerable increase in the international price of the same goods touching a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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