Customs, Excise and Gold Tribunal - Delhi
India Infusion Ltd. vs Collector Of Customs on 3 June, 1992
Equivalent citations: 1993(63)ELT263(TRI-DEL)
ORDER P.K. Kapoor, Member (T)
1. The appellant placed an order on the Swiss supplier for the import of a Form Fill and Seal Machine alongwith necessary attachments required for the production of intravenous solution in asceptic packaging. The proforma invoice issued by the supplier showed the price of machine and the necessary attachments as S. Fr. 9,93,730/-. Even though the Proforma Invoice was issued by the supplier in August, 1987 the Letter of Credit for S. Fr. 9,93,730/- for the import of the machine was opened by the appellant in favour of the supplier on 17-11-1989. For the clearance of the machine which was imported in June, 1990, the appellants filed Bill of Entry No. T.K. 3803 dated 11-7-1990 in which the goods were declared as "One No. of Asceptic Form Fill and Seal Machine. Type 302 complete with accessories for pharmaceutical industry". The value of the imported machine and accessories was declared as Rs. 1,25,13,177/-. In respect of Invoice No. 8406 dated 28-6-1990 against which the goods were imported, the appellants produced Proforma Invoices, dated 5-8-1987, 10-11-1989 and 10-1-1990, each one of which showed the CIF value of the machine and accessories at S. Fr. 9,93,730/-. They also produced a letter dated 20-8-1990 in which the supplier while confirming the price of the goods quoted in Proforma Invoice dated 5-8-1987 had stated that after conclusion of the negotiations the importers had accepted the Proforma Invoice dated 5-8-1987. The customs authorities held the view that the goods having been imported in June, 1990, the Invoice price based on the price quoted by the supplier in 1987 could not be deemed as the value of the goods under Section 14(1) of the Customs Act, 1962. From the declared CIF price of S. Fr. 14,50,000/- of an identical 'Type 302 Form Fill and Seal Machine' imported by M/s. Gujarat Injects Limited against Invoice No. 8452 dated 14-7-1990 and Bill of Entry No. 5369 dated 16-7-1990 the department after deducting the values of three attachments which had not been imported along with the appellants machine, worked out the value of the machine and accessories imported by the appellants at Rs. 1,66,35,345/- as against the declared value of Rs. 1,25,13,177/-.
2. The appellants were served with the notice dated 5-9-1990 stating that the declared value of the imported machine and accessories did not appear to be in accordance with the provisions of Section 14(1) of the Customs Act, 1962. They were, therefore, asked to show cause as to why the value of the goods should not be determined in terms of Rule 5 of the Customs Valuation (Determination of Price of Imported Goods) Rules, 1988 (hereinafter referred as Customs Valuation Rules, 1988) on the basis of transaction value in respect of an identical machine imported by M/s. Gujarat Injects Ltd. After considering the points made by the appellants, in the impugned order the Collector held that the machine imported by M/s. Gujarat Injects Ltd. was identical and the difference in the values of two machines could not be due to the import of certain additional accessories/attachments along with the machine imported by M/s. Gujarat Injects Ltd. He rejected the appellants contention that their were qualitative differences between their machine and the machine imported by M/s. Gujarat Injects Ltd. He observed that from the copies of 3 Bills of Entry produced by the appellants including the Bills of Entry relating to the imports of 'Form Fill and Seal Machine' imported by M/s. Core Parenterals Ltd. in March, 1990, it could not be inferred that the machines imported against these Bills of Entry and the appellants machine were identical. He held that the transaction value of the imported machine could not be accepted and its assessable value was determinable under Rule 5 of the Customs Valuation Rules, 1988 on the basis of the transaction value of identical machine imported by M/s. Gujarat Injects Ltd. after making necessary adjustments on account of certain parts and accessories that had not been imported alongwith the machine imported by the appellants. On this basis he held that the assessable value of the machine and attachments imported by the appellants was Rs. 1,58,04,073/- as against the declared value of Rs. 1,25,177/-. On the grounds that the value of the machine was misdeclared he ordered its confiscation under Section 111(m) of the Customs Act, 1962. He, however, gave the appellants the option to redeem it on payment of a fine of Rs. 10,00,000/-. He also imposed a penalty of Rs. 2,50,000/- on the appellants.
3. On behalf of the appellants the learned Senior Advocate Shri Kapil Sibal with Advocate, Shri S.H. Sanjanwala appeared before us. Shri Kapil Sibal stated that in 1987 the appellant had entered into a contract with the Swiss manufacturer for the import of an "Asceptic Form Fill and Seal Machine - Type 302" alongwith essential attachments at a price of S. Fr. 9,93,730/- C & F equivalent to Rs. 1,25,13,177/-. He added that on the basis of the order placed by the appellant, the supplier had undertaken the manufacture of the machine but due to certain reasons the appellant could not open the Letter of Credit before November, 1989. He stated that for the clearance of the machine and the attachments which were imported in June, 1990 a Bill of Entry No. P/M 3763/39 dated 1-7-1990 was filed. However, having regard to the import of an identical machine though with different attachments by M/s. Gujarat Injects Ltd. at the declared price of S. Fr. 14,59,000/- equivalent to Indian Rs. 1,64,70,639l- a show cause notice dated 5-9-1990 was issued by the Assistant Collector of Customs alleging that in terms of Rule 5 of the Customs Valuation Rules, 1988 the value of the imported machinery worked out to Rs. 1,66,35,345/-. The show cause notice also proposed the confiscation of the goods in question and imposition of a penalty on the appellants. The learned Senior Advocate contended that the machines imported by M/s. Gujarat Injects Ltd. and by the appellants were not identical inasmuch as accessories and attachments imported with each of these machines differed materially and certain attachments imported by M/s. Gujarat Injects Ltd. were not imported by the appellants. He stated that the machine imported by M/s. Gujarat Injects Ltd. was transacted for importation in the year 1990 and in respect of machine which was manufactured in 1990 the Letter of Credit was opened in May, 1990 whereas the machine imported by the appellants was manufactured in 1987 and the Letter of Credit for its import was opened in November, 1989. He added that apart from pointing out these differences, in the proceedings before the Collector the appellants had referred to the Bill of Entry filed by M/s. Core Parenterals Ltd., Ahmedabad for the importation of identical machines at a price of S. Fr. 7,50,000/- in March, 1990 and two earlier Bills of Entry relating to the import of similar machines by the same party in December, 1989 and January, 1988 at the declared price of S. Fr. 7,50,000 and S. Fr. 9,00,000/- respectively. He contended that in terms of Customs Valuation Rules, 1980 the value of any imported goods has to be determined by applying the Rules sequentially. He argued that Rule 5 had no application in the appellant's case since the transaction value was determinable in accordance with provisions of Rules 3 & 4. He stated that even if it was assumed that Rule 5 was applicable, then in terms of sub-rule (3) of Rule 5 on account of availability of different values for identical goods imported by M/s. Core Parenterals Ltd. the value of the appellants goods should have been based on the lowest of the different available prices. He contended that the order passed by the Collector, determining the value of the imported machine and the attachments at Rs. 1,66,35,345/- on the basis of the declared price of the machine and attachments imported by M/s. Gujarat Injects Ltd. as against the declared value of Rs. 1,25,13,177/- and holding that the goods were liable for confiscation under Section 111(m) of the Customs Act was bad in law and without jurisdiction inasmuch as Section 14(1) of the Customs Act, 1962 provides for levy of Custom duty on the price at which such or like goods are ordinarily sold or offered for sale when there being no other consideration for sale. He argued that in absence of any mutuality of interest between the importer and the supplier and the transaction between the appellants and the supplier being on principal to principal basis and the price being the sole consideration for the sale, the contracted price should have been taken as the assessable value under Section 14 of the Act.
4. Continuing his submissions the learned Counsel stated that Rule 3 of the Customs Valuation Rules, 1988 provides that the value of any imported goods shall be the transaction value and the transaction value has been defined in Rule 4 to mean the price actually paid or payable for the goods when sold for export to India. He contended that a combined reading of Rules 3 and 4 makes it clear that except in situations enumerated in sub-rule (2) of Rule 4 the price actually paid or payable for the goods has to be deemed as the transaction value for the purpose of assessment under Section 14 of the Act. He added that Rule 3(ii) also makes it clear that only when the transaction value under Rule 4 cannot be determined, the provisions of Rule 5 can be invoked for determining the value on the basis of the transaction value of identical goods. On the grounds that the price at which such or like goods are ordinarily sold or offered for sale at any time cannot be determined on the basis of a solitary transaction, the learned Counsel argued that the adjudicating authority had erred in determining the value of the imported machine on the basis of the price of the machine imported by M/s Gujarat Injects Ltd. The learned Counsel argued that in terms of Rule 3 the price actually paid or payable for the imported goods has necessarily to be taken as the assessable value unless the buyer and seller are related and they have interest in each other's business.
5. The learned Counsel further submitted that the invoice price was acceptable as the assessable value of the imported machine and attachments since the supplier had agreed to supply the goods without any escalation of price in terms of the original contract entered into in 1987. In this regard he placed reliance on the Tribunal's decision in the case of Jalaram Trading Co. v. Collector of Customs, reported in 1991 (55) E.L.T. 614. Relying upon the Tribunal's decision in the case of Collector of Customs v. Nippon Bearings (P) Ltd., reported in 1991 (55) E.L.T. 68 and Gold Plast India (Pvt.) Ltd. v. Collector of Customs, Bombay, reported in 1991 (53) E.L.T. 147 (Tri.), Shri Kapil Sibal contended that the charge of under invoicing or misdeclaration of value cannot survive since the dealing between the suppliers and the appellant was at arms length and in view of a series of imports of identical machines by M/s. Core Parenterals Ltd. at even lower prices it could not be said that ordinarily the goods in question were being sold at higher price. On these grounds he contended that the impugned order rejecting the "transaction value" of the imported machine and imposing penalty on the appellants was not sustainable.
6. Appearing on behalf of the Revenue the learned JDR Shri Prabhat Kumar stated that the machine covered by the suppliers Invoice No. 8406, dated 28-6-1990 imported by the appellant against Bill of Entry No. T.K. 3803 dated 11-7-1990 was identical to the machine covered by Invoice No. 8452 dated 14-7-1990 which was imported by M/s. Gujarat Injects Ltd. against Bill of Entry No. 5369 dated 16-7-1990. He added that the Collector had pointed out in his order that the machines were of the same model, type, design and except for 3 attachments listed in the Collector's order, all other attachments and accessories imported by M/s. Gujarat Injects Ltd. had been imported along with the machine received by the appellants. He stated that the appellants' contention that the machines imported by M/s. Gujarat Injects Ltd. had different features and specifications had been dealt with by the Collector who had pointed out that in terms of Operation Manual the machines were of the same model, design and capacity. He contended that the machines imported by the appellants and M/s. Gujarat Injects Ltd. being identical and both imports being contemporaneous, in view of the large difference in the transaction values of the two machines, it was permissible to determine the value of the machine imported by the appellants on the basis of the price to the machine imported by M/s. Gujarat Injects Ltd. after allowing suitable adjustment on account of attachments and accessories which had not been imported by the appellants. He stated that Section 14(1) of the Customs Act incorporates the basic provisions relating to the determination of the value of any goods on which duty of customs is chargeable with reference to the value. Referring to the Sub-section (1A) of Section 14 he contended that the provisions relating to "Transaction Value" in Rules 3 and 4 of Customs Valuation Rules, 1988 cannot be viewed in isolation and have to be read along with Section 14(1). He argued that for these reasons invoice price representing "the price paid or payable" would not be acceptable as the "transaction value" under Rule 4 if it does not represent the price at which such or like goods are ordinarily sold or offered for sale at the time or place of importation.
7. The learned JDR reiterated his stand that the machines imported by the appellants and M/s. Gujarat Injects Ltd. being identical and both imports having been effected at or about the same time at vastly different prices, in terms of Section 14(1) which has overriding effect the Collector was justified in holding that the invoice price in respect of the machine imported by the appellants could not be deemed as the "transaction value" of the goods. He argued that there was no force in the appellants contention that the Bills of Entry in respect of machines imported by M/s. Core Parenterals Ltd. in 1987, 1989 and March, 1990 should have been taken into account by the Collector while determining the value of the imported machine at the lowest of the available transactions values in terms of Rule 5 of the Customs Valuation Rules, 1988 since there was no evidence to show that the disputed machine and the machines imported by M/s. Core Parenterals Ltd. were identical and also for the reasons that the imports by the appellants and M/s. Core Parenterals Ltd. could not be deemed as contemporaneous. Shri Prabhat Kumar further argued that the appellants' contention that the value of the imported goods has to be the "transaction value" or the price paid or payable when the buyer and seller are not interested in each other's business and the price is the sole consideration has to be rejected since in terms of Sub-section (1A) of Section 14 the provisions of Customs Valuation Rules, 1988 have to be read along with the Section 14(1). In support of his arguments he cited the following case law :-
1991 (53) E.L.T. 122 - Peak Craft v. Collector of Customs 1992 (58) E.L.T. 126 (Tri.) - Tribunal's Order No. 293/91A in the case of Narayan International v. Collector of Customs, Delhi.
1988 (38) E.L.T. 471 - Globe Engg. Works v. Collector of Customs 1987 (29) E.L.T. 155 - Basant Inds. and Anr. v. Collector of Customs.
1988 (34) E.L.T. 388 - Nav Bharat Enterprises Pvt. Ltd. v. Collector of Customs 1985 (22) E.L.T. 283 - Automotive Enterprises v. Collector of Customs, Bombay.
1987 (28) E.L.T. 318 - Macneill & Magor Ltd. v. Collector of Customs, Calcutta.
8. After conclusion of the arguments by both sides, Shri Kapil Sibal, Senior Advocate filed a note in which the following submissions were made on the case law cited by the learned JDR :-
(1) The decision in the case of Peak Craft v. Collector of Customs, reported in 1991 (53) E.L.T. 122 (Tribunal) is not relevant to the points involved in the appellant case since it relates to CIF value of imported goods and not transaction value.
(2) The decision in the case of Globe Engineering Works v. Collector of Customs, reported in 1988 (38) E.L.T. 471 (Tribunal) is also not relevant as there are 3 comparable imports in the instant case where price has remained almost constant and the last import was only two months prior to the import of goods by the appellants;
(3) The decision in the case of Basant Industries and Anr. v. Collector of Customs, Bombay and Anr., reported in 1987 (29) E.L.T. 155 (Tribunal) is also not relevant as it was a case of goods imported on instalments;
(4) In the case of Nav Bharat Enterprises Pvt. Ltd. v. Collector of Customs, Madras, reported in 1988 (34) E.L.T. 388 (Tribunal), it was held that exceptionally low price, though genuine, could not be the basis for assessment since the Department had established that the exporter had raised the price between the date the proforma invoice and the opening of Letter of Credit on account of the international price of the goods having gone up. In the instant case on the other hand, there is no evidence of any general rise in the international market price of the machine in question. M/s. Core Parenterals Ltd. had imported the same machine at a lower price which was indicative of the fact that the foreign exporter had not raised the price after the Letter of Credit was opened by the appellants. The appellants price could not be deemed as exceptionally low since it was higher than the price of M/s. Core Parenterals Ltd. and only 15% less than the price declared by Gujarat Injects Ltd.;
(5) In case of Automotive Enterprises v. Collector of Customs, Bombay, reported in 1985 (22) E.L.T. 283 (Tri.) on the basis of the decision in the case of Union of India and Ors. v. Glaxo Laboratories, reported in 1984 (17) E.L.T. 284 (Bom.), it was held that the invoice price even if true would not necessarily form the basis for determination of assessable value which is a deemed price at which such or like goods are generally sold or offered for sale in the course of international trade. In the instant case the facts on record clearly establish that the price at which machine was offered for sale by the foreign suppliers to different buyers in India was not uniform and there was no evidence in the form of circular or price list indicating that the goods were generally being sold at a higher price to buyers in India than the price declared by the appellant. Since no deemed price was available the highest price could not be taken as the deemed value;
(6) In the case of Macneill & Magor Ltd. Calcutta v. Collector of Customs, Calcutta, reported in 1987 (28) E.L.T. 318 (Tribunal), it was held that the price at which the goods were imported was about 100% lower than the list price at which the goods had been imported by other independent importers. The goods were, therefore, held to have been under-valued and penalty was imposed on the importer. However, in the instant case, there is no list price and the facts of the case reveal that the same machine was sold to different importers at different prices and difference between the appellants price and the highest price was less than 15%. Hence, the invoice price in the appellants case represents the assessable value. Further in view of the judgment of the Supreme Court in the case of Hindustan Steel Ltd., reported in 1978 (2) E.L.T. (J 159) there was no case for imposition of penalty.
(7) The decision in the case of Aarkeyness Imports Corporation, New Delhi v. CC, New Delhi, reported in 1988 (12) ETR 112, is not relevant since in the appellants case the department has not been able to establish that the transaction was not genuine or some extra commercial consideration was involved.
9. We have examined the records of the case and considered the submissions made on behalf of both sides. It is seen that in pursuance of a contract entered into by the appellants in 1987, the foreign suppliers issued the proforma invoice dated August, 1987 for C & F S. Fr. 9,93,730/- in respect of an " Asceptic Form Fill and Seal Machine Type 302 together with attachments." The appellants established a Letter of Credit for the importation of the machine on 17-11-1989. The machine was imported in June, 1990 against Invoice No. 8406 and for its clearance Bill of Entry No. T.K. 3803 dated 17-7-1990 was filed in which the goods were declared as "One No. of Asceptic Form Fill and Seal Machine Type 302 complete with Accessories for Pharmaceutical Industry". The value of the imported machine and accompanying attachments was declared as Rs. 1,25,13,177/-. In the impugned order, it has been held that the value of the imported machine and attachments had been misdeclared in the Bill of Entry and did not represent the assessable value of the goods in terms of Section 14 of the Customs Act, 1962. On the basis of the transaction value of an identical machine imported at or about the same time by M/s. Gujarat Injects Ltd. the adjudicating authority further held that in terms of Rule 5 of the Customs Valuation Rules, 1988 the assessable value of the machine and attachments imported by the appellants ought to have been Rs. 1,58,04,073/- as against the declared value of Rs. 1,25,13,177/-.
10. The main points raised on behalf of the appellants are that in terms of Rule 3 and 4 of the Customs Valuation Rules, 1988 except in situations enumerated in sub-rule 2 of Rule 4 the value of any imported goods is the "transaction value" or the price actually paid or payable for the goods. On these grounds, it has been contended that the price actually paid or payable for the imported machine and attachments has to be deemed as assessable value, particularly when there was no evidence that the buyer and seller are related or have interest in each other's business. It has been claimed that even though in respect of the imported machine and attachments the Letter of Credit was established in 1989, and the machine was imported in June, 1990 the invoice price was acceptable as assessable value since the suppliers had agreed to supply the goods without any escalation of price in terms of the original contract entered into in Aug., 1987. It has also been contended that provision of Rule 5 can be invoked for the determination of the value only when the transaction value cannot be determined under Rule 4 and in the appellants case even if it is assumed that the value of the imported machine and attachments was determinable under Rule 5, then on account of the availability of different value for identical goods imported at or about the same time by M/s. Core Parenterals Ltd. in terms of sub-rule (3) of Rule 5 the value of the appellants' goods would be determinable on the basis of the lowest of the different available prices. According to the appellants the price of their goods was not determinable on the basis of the price of the machine imported by M/s. Gujarat Injects Ltd. since that machine was manufactured in the year 1990 and was not identical to the machine imported by them which was manufactured in the year 1987 and also for the reason that for the purpose of Section 14(1) the price at which such or like goods are originally sold cannot be determined on the basis of a solitary transaction.
11. As against the points raised by the appellants the Department's case is that the provisions relating to "transaction value" in Rules 3 and 4 of the Customs Valuation Rules, 1988 cannot be viewed in isolation and have to be read alongwith Section 14(1) and accordingly the invoice price representing "the price paid or payable" would not be acceptable as the "transaction value" under Rule 4 if it did not represent the price at which such or like goods are ordinarily sold or offered for sale at the time and place of importation. It has been claimed that the machines imported by the appellants and M/s. Gujarat Injects Ltd. being identical and both imports having been effected at or about the same time at vastly different prices in terms of Section 14(1) which has overriding effect, the invoice price in respect of the appellants machine could not be deemed as the "transaction value". It has been contended that the machines imported by the appellants and M/s. Gujarat Injects Ltd. were identical in all respects except that 3 attachments listed in Collector's order had not been imported by the appellants and this fact had been taken note of by the adjudicating authority while working out the value of the appellants machine on the basis of the price of the attachments imported along with the machine imported by M/s. Gujarat Injects Ltd. It has also been claimed that the transaction value of the appellants goods was not determinable on the basis of the transaction value of the machine imported by M/s. Core Parenterals Ltd. since there was no evidence that the machines imported by M/s. Core Parenterals Ltd. were identical and also for the reason that the appellants import and the imports by M/s. Core Parenterals Ltd. were not contemporaneous.
12. In order to examine the points raised on behalf of both sides, we consider it desirable to reproduce below the relevant provisions of Section 14 of the Customs Act, 1962 :-
"Section 14. Valuation of goods for purposes of assessment. - (1) For the purposes of the Customs Tariff Act, 1975 (51 of 1975), or any other law for the time being in force whereunder a duty of customs is chargeable on any goods by reference to their value the value of such goods shall be deemed to be the price at which such or like goods are ordinarily sold, or offered for sale, for delivery at the time and place of importation or exportation, as the case may be, in the course 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.
(1-A) 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."
13. Since the provisions of the Act have overriding effect the value of any imported goods or their "transaction value" determined under any of the provisions of the Customs Valuation Rules, 1988 has necessarily to conform to the provisions of Section 14(1). Prior to the amendment of Section 14 in 1988 the provisions of Section 14(1) and the deleted Sub-section (b) were mutually independent and in the event of the value not being found to be determinable under Section 14(1) it was to be determined independently under the Customs Valuation Rules, 1963. This position has undergone a change since the provisions of Section 14(1) and Customs Valuation Rules, 1988 are not mutually exclusive since Section 14(1 A) reads as "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."
14. In the case of Babcock Venkateshwara Hatcheries (P) Ltd. v. Collector of Customs, Bombay, reported in 1985 (20) E.L.T. 335 the Tribunal had observed that under Section 14(l)(a) of the Customs Act, the value for the purpose of assessment of duty is a deemed value and need not necessarily be the price agreed upon by the parties. In this regard paragraph 9, of the decision is reproduced below :-
"Another judgment which would also be relevant in this connection is that of the Bombay High Court in Union of India v. Glaxo Laboratories 1984 (17) E.L.T. 284 (Bombay). At page 280 it is observed that -
"no arguments are raised, nor is the respondent doubting the right of the department to take into account the international price of the disputed goods for the purpose of Customs duty".
This was with reference to the fact that the respondent (M/s. Glaxo Laboratories) had paid Customs duty on the international market price but wanted the licence to be debited with reference to the CIF value which was the actual value under the contract between them and tine seller. With reference to these facts it had been observed at page 291 that "this actual price of supply which we would assume is a genuine price in that deal can vary from the international market price which is the value for the purposes of Customs taxation." Therefore, these judgments make it abundantly dear that the agreed price between the parties, though genuine, would not be the concluding factor with reference to assessment for Customs duty since under Section 14(l)(a) duty will have to be levied on the deemed value, which is defined in the section as extracted earlier."
As observed by us earlier, the transaction value in terms of any of the provisions of Customs Valuation Rules, 1988 has to be consistent with the provisions of Section 14(1) of the Customs Act, 1962. Hence, it follows that the price paid or payable in respect of any imported goods would not represent the "transaction value" under Rule 4 of the said rules, if it is widely at variance with the price at which such or like goods are sold or offered for sale at the time and place of importation in the course of international trade, when the buyer and seller are not related.
15. It is seen that in the impugned order the Collector arrived at the finding that the price declared on the basis of the supplier's invoice in respect of the machine imported by the appellants in June, 1990 did not represent the "transaction value" in terms of Rule 4 of the Customs Valuation Rules, 1988. He also held that the value of the imported machine and attachments was determinable on the basis of the price of another identical machine which was also imported in June, 1990 by M/s. Gujarat Injects Ltd. In this regard the appellants case was that a solitary import of a "Form Fill and Seal Machine - Type 302" by M/s. Gujarat Injects Ltd. could not form the basis for determining the price at which the machines in question were being sold at the relevant time in the course of international trade. It was also contended by the appellants that there could not be any uniformity in the price of the machines imported by different buyers since "Form Fill and Seal Machine - Type 302" comprises of a highly sophisticated system which can have varying features depending upon the requirements of each particular importer. In support of their claim, the appellants cited the following details of imports of "Form Fill and Seal Machines -Type 302" from the same supplier by M/s. Core Parenterals Ltd. :-
1. Bill of Entry No. H 41452 dated 30-12-1987, Value S. Fr. 9,00,000/-
2. Bill of Entry No. I 324/1289 dated 5-12-1989 Value S. Fr. 7,50,000/-.
3. Bill of Entry No. 1417/5-90 dated 20-3-1990 Value S. Fr. 7,50,000/-
The appellants argued that the declared value of S. Fr. 7,50,000/- in respect of a "Form Fill and Seal Machine - Type 302" imported by M/s. Core Parenterals Ltd. just 3 months prior to the appellants import having been accepted by the Department, there was no justification for the rejection of the 'transaction value' of the machine and attachments imported by them.
16. On reference to the impugned order we find that the appellants' claim that the declared value of the imported machine and attachments represented the assessable value of the goods under Section 14 since it was higher than the transaction value of the machine imported by M/s. Core Parenterals Ltd. was rejected by the Collector on the following considerations :-
"System imported by M/s. Core Parenterals Limited in March 1990 at the price of S. Fr. 7,50,000/- may not be identical to system imported by M/s. Gujarat Injects Limited and M/s. India Infusion Limited and no evidence other than copy of B/E has been produced to verify the items imported in that consignment. Even otherwise the import in that case was in March 1990 and total net weight of goods imported by M/s. Core Parenterals Limited was 4940 kgs. as mentioned in the photo copy of B/E whereas total net weight of system imported by M/s. India Infusion Limited is 5280 kgs."
It is seen from the records of the case that even though the copy of the Bill of Entry No. I-417/5-90 dated 20-3-1990 on which the appellants had placed reliance covered a "Form Fill and Seal Machine, Type-302" the Collector held that the system imported by M/s. Core Parenterals Ltd. in March, 1990 at a price of S. Fr. 7,50,000/- might not have been identical to the systems imported by M/s. Gujarat Injects Ltd. and M/s. India Infusion Limited. It is evident that even though the original Bill of Entry bearing the examination report and the attached manufacturers invoice were a part of the Customs records, the Collector made no efforts to refer to these vital documents and the operational manual issued by the manufacturer in order to examine the appellants claim that the system imported by them was identical to the system imported by M/s. Core Parenterals.
17. We find that the only consideration which weighed with the Collector while rejecting the appellants' claim that the 'transaction value' in respect of the machine imported by them could not be rejected since it was higher than the value accepted by the Department in respect of an identical machine imported by M/s. Core Parenterals was that the net weights of the two consignments being different they could not have been identical. We are of the view that on this point the Collector ought to have given a reasoned finding after examination of the relevant documents such as the original Bill of Entry, supplier's invoice, and operational manual as he had done while comparing the appellants' machine with the machine imported by M/s. Gujarat Injects Ltd. It is seen that he made no effort to determine whether the difference in the weights of the two consignments was attributable to the difference in the model or capacity of the two machines or merely on account of the difference in the attachments imported alongwith the two systems. We are of the view that even in respect of his finding that the imports of the "Form Fill and Seal Machine - Type 302" by M/s. Core Parenterals Ltd. and the appellants in March, 1990 and June, 1990 respectively were not contemporaneous the Collector ought to have given a reasoned finding after taking into account the fact that in respect of sophisticated machines or plants which are not covered by any published price-list, while deciding the question whether any two imports are contemporaneous the dates and terms of the relevant contracts have also to be taken into account.
18. In view of the foregoing we hold that the impugned order is not a speaking order and suffers from non-application of mind. We, therefore, set aside the order appealed against and remand the case to the concerned authority for de novo adjudication in accordance with law while adjudicating the case the adjudicating authority shall keep in mind the observations made by us in this order and grant suitable opportunity for personal hearing. Since the matter is quite old we shall appreciate if the case is adjudicated within 3 months of the date of receipt of this order.
19. The appeal is, therefore, allowed by way of remand.