9911796707
TMI Blog1999 (7) TMI 601X X X X Extracts X X X X X X X X Extracts X X X X ..... by them on the foreign suppliers . Bills of Entry were filed at the port of import, namely, Bombay port, under Section 46 of the Customs Act, for the purpose of assessment and clearance. In respect of certain consignments, yellow bills of entry were filed in order to get the consignments re-warehoused at the Customs bonded warehouse of the Central Warehousing Corpn., (CWC) which was later cleared on ex-bond on the Bills of Entry as required under Section 68 of the Customs Act. On inspection of the import documents, the Department found that there were certain discrepancies in the prices shown in the invoice in relation to some items. 2.2 A notice was issued on 26-3-1991 calling upon them to show cause as to why against the imported 129 components as detailed in Annexure to the show cause notice and goods manufactured therefrom, action should not be taken against the appellants for mis-declaration of value under Section 46 (4) of the Customs Act and why the goods should not be held liable to confiscation under Section 111(m) read with Section 3(2) of the Imports and Export (Control) Act, 1947 as also under Section 13(2) read with Section 68 of the Foreign Exchange Regulation Act, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en by RX Netherlands and supplied to the appellants was from the said data base and it related to the components of 1045 Model which were being supplied to the appellants. The appellants maintain that the invoice raised by RX by and large reflected the prices prevailing in RX Netherlands at the time of shipment and it had nothing to do with the date of the purchase order placed by the appellants. It was for this reason, according to the appellants, that the total value shown in the invoice did not tally with the value of the L/C or purchase order. The appellants further contended that the difference in value was within the knowledge of the Department as copies of L/C had been furnished to the Customs as and when required by them. Moreover, appellants imports consisted of three types, namely, (i) import of components used in the manufacture of photocopiers in their own factory which constituted the major part of imports, (ii) import of photocopiers (complete machines) for third parties where the appellants act as agents of RX, UK, and (iii) the import of components from sources other than RX to meet demands only for the manufacture of photocopiers. As regards the difference between ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e were four price lists concurrently in operation during April, 1985 to April, 1986. He rejected the said plea as an after thought. As regards the defence of the appellants regarding different prices having been shown at different places in the invoice for the same component. Collector rejected the appellants plea that this was due to computer error. Collector noted that the appellants had themselves paid the differential duty when the error was pointed out without waiting for checking the position from the supplier. This showed that the appellants knew that there was undervaluation with regard to certain components and they did not wait for any verification by the foreign supplier as regards any inadvertent mistake or computer error from the side of the supplier. As regards the contentions of the appellant that the prices shown in purchase order did not represent the correct price and it was the negotiated lower price which should form the basis in arriving at the assessable value, Collector dismissed the said argument by observing that there was no evidence of any such negotiations for reduction of price after finalisation of purchase order. The Collector however, accepted the co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wed the said financial year, namely, 1st November of every year to 31st October of the succeeding year. Because of certain operational problems in adhering to the practice of one year validity for price list - largely due to the huge losses incurred by the company during the period and after negotiations with the purchaser - RX UK had decided to effect supplies to the appellants on the basis of manufacturing transfer price (MTP) + 10% margin as against MTP + 25% margin as agreed to earlier. This is reflected in the price list effective from 1st November, 1985. RX UK had been charging the appellants on the basis of MTP + 25%. After the negotiation prices were revised for the period starting from 1-5-1986 adopting the basis of MTP + 10% which was incorporated in the three succeeding price lists. Ld. Counsel drew attention to Annexure 4 to the Memo of Appeal in support of the submissions made by him in this behalf. 6. Explaining further the procedure followed by the foreign supplier for raising the invoice, ld. Counsel submitted that the invoice raised by RX served both as an invoice as well as package lists. Thus, the invoice mentioned the details of entire consignment package wise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... suppressed the revised invoice price which was in their possession since 15-12-1986 with clear intention to evade duty for obtaining assessment on the basis of previous invoice representing lower price when compared with the prices of the same items mentioned in the purchase order against which the components were supplied. The value indicated in the previous invoice did not thus represent the assessable value for purposes of Section 14(2). He submitted that all the defences presently advanced on behalf of the appellants have been considered by the Collector in the impugned order at Para 29 and subsequent paragraphs. As regards the appellants contention that there were in fact four price lists operated by the suppliers at the relevant period, he submitted that the appellants had, in their reply to the show cause notice had only contended that the reason for different prices shown in different places in the same invoice for the same components, was due to computer error. Instead of taking up the matter with the supplier, appellants had paid the differential duty. The argument presently advanced, viz, that there were four different price lists in operation at the suppliers end and t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he date of the purchase order nor on the value indicated in the purchase order. To substantiate this, appellants have submitted a Paper Book, viz, Paper Book III. On a perusal thereof we find that the claim of the appellants that foreign suppliers were following a system of charging the value in their invoices based on their own price list prevalent on the date of invoicing and not on the basis of the appellants purchase order or the value indicated therein has some force. To the said extent we find that the appellants have shown that there was no deliberate effort on their part to misdeclare the assessable value. Since it is the settled legal position that for purposes of Section 14(1) of the Customs Act the invoice value has to be treated as assessable value where the seller and buyer have no interest in the business of each other, we find that their claim for acceptance of the invoice value as representing the assessable value needs consideration. Appellants have also sought to establish that though the suppliers were generally following the rule of adhering to a price list for a period of one year from 31st October to 1st November of the following year, they have also argued t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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