Customs, Excise and Gold Tribunal - Mumbai
Hindustan Pencils Ltd. vs Commissioner Of Customs on 7 January, 1999
Equivalent citations: 1999ECR806(TRI.-MUMBAI), 1999(108)ELT307(TRI-MUMBAI)
ORDER G.N. Srinivasan, Member (J)
1. This is an appeal filed by the appellant against the decision of the Collector of Customs (Appeals) Mumbai made in the order-in-appeal captioned above, whereunder, he rejected the appellant's plea of stock lot.
2. The appellants imported 11700 gross of Pencil sharpner blades from Japan @ Yen 72 per gross vide Invoice No. 704, dated 15-4-1993. The goods had been described as pencil sharpner blades Art No. 5B "NTR" size 6.40-6.50 and it was supplied by M/s. Toa Industrial Co. Ltd. The department's case was that in respect of import of identical goods, it was noticed that the price was @ Yen 131 per gross of the same Art number and size and supplied by the same supplier from the same country of origin against Bill of Entry No. 911/193, dated 5-5-1993 and Invoice No. 703 dated 9-4-1993 imported by another importer. A query Memo was given. It was pleaded by the appellant that the goods are not comparable as the other importer M/s. Allied Instruments did not place the order with the manufacturer and in the instant case the goods were stock lot bearing the logo 'NTR.' The stock got accumulated over a period of time due to excess production against the manufacturer's earlier order. Because the manufacturer could not get the buyers, they approached the appellant for getting rid of the stock lot at a reduced price. It is further pleaded by the appellant that the goods imported were new goods and not old and used and cannot be treated as inferior. They also pleaded that the department cannot compare the instant import with the import of M/s. Allied Instruments. The one important factor was that the goods had been packed in a protected packing and no year of manufacture shown on the packages.
3. It was contended before us by Shri Shah, the ld. Counsel appearing for the appellant that the fact that the goods bore the logo mark cannot be termed as meant for related person and the Customs officers failed to show that because they are related persons, the price had been reduced. He cited the decision in the case of Union of India v. Playworld Electronics Pvt. Ltd. -1989 (41) E.L.T. 368 (S.C.). He also stated before us that they have been importing the goods from 1989 onwards but because of the specific request of the sellers, originally they had rejected the request made by the sellers and subsequently in 1993 they have agreed for importing this goods which was stock lot. It was also pleaded by the ld. Counsel that the department did not prove that the goods were manufactured very recently to disprove the appellant's case of stock lot.
3. The ld. DR would rely upon the reasonings made in the lower authorities' orders.
4. We have considered the rival submissions. The first point in this case is relating to valuation of the goods in terms of provisions of Valuation Rules, especially regarding the provisions relating to the related person. Rule 2(2) of the said Rules describes about the related person. In this case, it has not been specifically proved by the department that the seller and the appellant were related persons in terms of provisions of Rule 2(2) of the Rules. The said Rule provides that persons should be deemed as related only if they are officers or directors of one another's business; they are legally recognized partners in business; they are employer and employee; any person directly or indirectly owns, controls or holds 5 per cent or more of the outstanding voting stock or shares of both of them; one of them directly or indirectly controls the other. The department could not prove that the seller and the importer appellant are falling into any of the categories mentioned above. Hence, in our view, it cannot be treated as related persons. As far as the other point is concerned, viz. stock lot, the appellant invited our attention to the letter written by Toa Industrial Co. Ltd. dated 27-2-1992. On 14-9-1992, again, they wrote a letter to the appellant mentioning about the term stock lot. Again on 31-3-1993 they wrote letter to the appellant mentioning the term stock lot. The department is unable to disprove by any other evidence. Once it is accepted as stock lot, it is an accepted commercial practice in the international transactions, the price will be at a reduced one due to very nature of the distressed sale. We, therefore, are of Paragraph number as per certified copy. the view that the fact that there has been import made by some other importer at an higher value, cannot ipso-facto enable the department to enhance the value of the goods. The goods are not comparable. The department has not made out any case for enhancement of the value. Hence, we reject the contentions raised by the department. The impugned order is set aside. The appeal is allowed with consequential relief, if permitted by law.