Customs, Excise and Gold Tribunal - Delhi
Collector Of Customs vs Nippon Bearings (P) Ltd. on 4 March, 1991
Equivalent citations: 1991ECR587(TRI.-DELHI), 1991(55)ELT68(TRI-DEL)
ORDER S.V. Maruthi, Member (J)
1. These 4 appeals are disposed of by a common order as issue involved is common to all the appeals.
2. Briefly the facts in each appeal are as follows :-
The respondents in appeal No. C/3339/88-A which arises out of an order in SS/10-53/87 dated 20th March, 1987 of the Collector, imported one consignment of 'Ball Bearings' No. 2307, 2313, 2313K of Hungarian origin from M/s. Mak Automobile Co., London, (U.K.). The goods were shipped directly by M/s. Metal Impex Budapex, Hungary. Bill of Entry No. 3065/210, dated 6th January, 1987 was filed. A show cause notice dated 11th March, 1987 was issued to the importers proposing to enhance the value from 0.90 US $, 2.15 US $ to 2.45 U S $ and 8.11 US $ respectively. It is also proposed to confiscate the goods under Section 111(d) of the Customs Act, 1962. The proceedings were initiated on the basis of Hungarian manufacturers' price list No. 830228 issued in 1983. On receipt of the reply the Collector accepted the invoice price of the bearings and dropped the proceedings against which the appeal is filed.
3. The Collector accepted the invoice price on the following grounds :
a) The invoice price is based on the price list No. 840216 dated 16th February-, 1984 published by the manufacturers and attested by Second Secretary, Embassy of India, Budapest on 6th March, 1987. The said price list i.e. No. 840216 was certified to be in force by the manufacturers by their letter No. 21/637/87 dated 4th March, 1987. M/s. Metal Impcx wrote a letter No. 41/617/1904 requesting the Embassy of Hungarian Peoples Republic in New Delhi to send the price list No. 840216 dated 16th February, 1984 to the Collector for 1984 shipment to India. He also found that no price list was issued in 1983 bearing No. 830228. He also found that after 1981 they published price list only in 1984.
4. He accepted the invoice price list as suppliers were Government body, and since price lists were authenticated by the Indian Embassy in Budapest there is no reason why it should not be accepted in the absence of evidence of contemporary imports at higher prices.
5. In addition he also observed that the deptt. has not been able to cite a single contemporaneous import of bearings from Hungary at higher price. Rejecting the reason adopted by the deptt. he observed that if the manufacturers decided to reduce the prices of bearings of certain types in particular, in view of their restricted import into India nobody can stop them from doing so. The reduction in prices, he observed, is as a result of various commercial practices. Referring to the quotations seized from M/s. Amit Sales Corpn., Bombay during search indicating higher prices, he observed that the same cannot be the basis for rejecting invoice price as negotiations in price took place and prices were brought down. The reasoning adopted by the deptt. that there is an increase in the cost of raw material, therefore, the cost of bearings should be increased was rejected on the ground that the increase in the cost of raw material cannot be the basis for determining the value of the imported goods namely, the bearings.
6. The respondents M/s. Dhakaj Enterprises, Bombay in appeal No. 3340/88-A which arises out of an order in S/10-52/87-J dated 20-3-1987 by the Collector, imported a consignment of 11247 pieces of M.G.M. brand ball bearings of Hungarian origin type No. 30206A from M/s. Mak Automotive Co., London. The bearings have been shipped directly to the importers by M/s. Impex Metal, Budapest. A bill of entry No. 260/6, dated 6-2-1986 was filed. A show cause notice was issued proposing to enhance the price of ball bearings and confiscate the same on the basis of price list No. 830228/1983. On receipt of the reply, the Collector dropped the proceedings accepting the invoice price against which the present appeal is filed.
7. The reasoning adopted by the Collector in accepting the invoice price is the same as in order No. S/10-53/87.
8. The respondents M/s. Lyallpur Machinery Stores in appeal No. C/3341/88-A which arises out of an order S/l0-95/85 of the Collector imported bearing No. 6200 to 6204, 6204C3,6206 to 6209, 6211,6305 to 6309 of polish origin, from M/s. State Import & Export Corpn., Impex Metal, Warszawa, Poland which is Government undertaking. A show cause notice was issued proposing to enhance the value and confiscate the goods under Section 111(d) of the Customs Act, 1962. On receipt of the reply, the Collector accepted the invoice price rejecting the appellants' contention against which the present appeal is filed.
9. The Collector in support of his order in addition to the reasons mentioned in paragraphs 4 & 5 (supra) gave the following reasons. The deptt. has not been able to cite a single import of F.L.T. make bearings of polish origin indicating higher prices. The deptt. while adopting the price list of 1979 and reducing it by 25% presumed that the prices of 1979 continued to be same even in the case of import made in 1984. He also relied on the letter No. PN/84, dated 11th April, 1984 from the consulate of Polish People Republic in Bombay addressed to the Collector of Customs, Bombay, signed by Vice counsel Sh. Keralock wherein prices of 18 types of bearings were given and also certified that their agent in Bombay have booked the said types of F.L.T. bearings of polish make at those prices. It was also mentioned that over and above those prices 10% discount was given it letter of credit exceeded US $ 10,000/-.
10. The respondents M/s. Shaheel Enterprises in appeal No. C/3342/88-A which arises out of an order No. S/10-181/86-J, dated 20th March, 1987 of the Collector imported three consignments of bearings No. 6215, 6213,6214, 6215K, 6302, and 63027 covered by bill of entry No. 1254/112,1254/82, & 1254/104 from Techno Import & Export Bukharest, Romania. A show cause notice was issued proposing to enhance the declared value and proposing to confiscate the goods under Section 111(d) of the Customs Act, 1962. On receipt of the reply, the Collector accepted the invoice price rejecting the appellants contention. Hence the appeal before us.
11. The Collector while reiterating the reasons given in paragraphs 4 & 5 supra found that the price-lists issued in 1983,1984,1985 are not disputed by the appellants, and that they failed to make out a case of identical goods being invoiced at different prices to different buyers in India. From the chart filed by the importers indicating comparative prices of bearings of 6200 series between Czechoslovakia, Hungary, Bulgaria, Korean and Japanese make with prices of Romanian make for 1983, 1984 & 1985, he found that prices of Japanese make are higher while prices of other countries are comparable. He also relied on a letter from Trade Commissioner, Trade Representation of the Socialist Republic of Romania in India, addressed to the Collector of Customs, Bombay. This letter disclosed that a high power delegation from Romania visited India to inquire into the reasons for loss of Romanion business in India.-Delegation observed that loss of business was mainly due to wide disparity between Romanian prices and the prices of other countries, and therefore, the existing prices were revised and the new price list No. 7-A/82 was issued w.e.f. 1st August, 1982 cancelling the earlier price list and was forwarded to the agents in India. In the said letter it was also confirmed on behalf of Techno Import Export that the price lists No. 7 & 7-A dated 1st August, 1982, subsequently amended on 16th February, 1.983 are the only authenticated price list for bearings being exported to India.
12. He also referred to and relied on a photocopy of import licence No. 2434571 dated 1st February, 1985 issued to M/s. Projects and Equipments Corpn. of India Ltd., New Delhi covering parts of crawler, tractor to be imported from Romania. Import licence bear the endorsement "Issued in 1984 Indo-Romanian Trade Plan Provision". List attached to the said import licence includes bearings of 6200 series and prices are also shown against these bearings. These prices are as per 1985 price list price. P.E.C. is a Government of India undertaking similar in character to STC.
13. He rejected the quotations and also the cost structure on the ground that the cost structure by indigenous manufacturers is not sound. He further observed the calculation given by the Ball Association is itself quite fictitious. He referred to a photocopy of Bill of Entry No. 598/75, dated 14th October, 1986 wherein Calcutta Custom House accepted the invoice prices. Holding as above the Collector accepted the invoice prices and dropped the proceedings.
14. Challenging the above orders of the Collector it is submitted by the DR that the order of the Collector is ab inilio void as it is in violation of principles of natural justice. Elaborating his arguments it is submitted that Ball and Roller Bearings Association of India gave a complaint on 21st January, 1984, and, on 21st June, 1985 to the Member, Customs, stating that the respondents are indulging in importing ball bearings on invoice price which is grossly under valued. On the basis of the complaints inquiries were made. During the course of inquiry proceedings, search of certain premises were conducted and documents were seized. One of the documents seized is the telex message dated 30th June, 1985 to Amit Sales Corpn. by M/s. Theodora Lane & Co. Bremen, Germany wherein prices quoted were much higher than the prices at which the respondents imported bearings. The Association also furnished prices at which Romanian ball bearings were sold to U.K. and West Germany, Singapore which are much higher than the prices of the impugned imports. M/s. Techno Import & Export, Romania by telex offered to sell bearings to Singapore at much higher price. The quotations seized and those furnished by the Ball Bearings Association, indicate that the Romanian bearings are quoted at a much higher rate to U.K., West Germany, Singapore in 1983, 1984,1985. According to Section 14(1)(a) where customs duty 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 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. Therefore, the price prevailing in international trade i.e. relevant for the purpose of determining the assessable value. International Trade means multinational trade and not bilateral trade, therefore, the price quoted by the countries from which the imports are made to other countries are relevant for the purpose of determining the assessable value. In view of the higher prices quoted in the international trade the prices at which the impugned imports are made do not represent the price under Section 14(1) of the Act. On the basis of this material show cause notices were issued to the respondents. However, the Collector, it is submitted that without applying his mind to the material disclosed, and without giving any opportunity to the appellants to prove their case and also to the Ball Bearings Manfg. Association disposed of the matter. Thus there is a non-application of mind on the part of the Collector and the order is ab initio void on account of violation of principles of natural justice. It is also submitted by Sh. Sunder Rajan that the deptt. is entitled for a reasonable opportunity to prove their case.
15. It is next contended that the elements constituting for the purpose of charging customs duty are the price in the course of international trade where the seller and the buyers have no interest in the business of each other and the price is the sole consideration for the sale or offer for the sale. The price for bearings imported, it is submitted, have been influenced by the consideration of enabling the importers to import a larger quantity of bearings against the same import licence, in view of very restricted import policy in respect of these types of bearings during 1984 to 1985 policy. Therefore, the price, is not the sole consideration for sale or offer for sale and it cannot be said that the seller and the buyer have no interest in the business of each other. He further submitted that the price is influenced by the restricted import policy and therefore it is not the price at which the goods are ordinarily sold. The quotations seized from the premises of M/s. Amit Sales Corpn. indicate higher prices and international prices of bearings during the period from 1982 to 1985 recorded a rise of 10 to 25%. Therefore, the price at which the goods are imported does not represent the price in the course of international trade.
16. Dealing with the imports from Poland, Shri Sunder Rajan submitted that in addition to quotations seized from M/s. Amit Sales Corpn. the offer from M/s. Rolf Weber & Co., West Germany to M/s. Ranchorddass Purshottam & Co. for the sale of various bearings of East European countries vide their letter No. EXP/SCHE dated 25th January 1984 indicate much higher price for the bearings of polish origin. Therefore, the invoice prices cannot be accepted in regard to polish imports.
17. It is next contended that the suppliers from Poland issued a price list in 1979 which covers the bearings in question. Thereafter another price list was issued in 1982 which did not cover the bearings imported. The prices of the bearings covered by 1982 price list was 25% less than the prices of bearings mentioned in 1979 prices. Since the suppliers have not issued a price list after 1982 the pries approved in 1979 price list less 25% should be the basis for determining the assessable value. It is next contended that in respect of those imports where the licence is restricted or banned, since the respondents have imported the goods more than the licence value it is proved that they have undervalued the goods. Therefore, it is submitted that the assessment of imported goods should be made under Rule 8 of the Customs Valuation Rules sustainable in law.
17.1. It is next contended by the SDR that the price list show an increase from 1982 onwards whereas the respondents imports price is on the decrease, this very fact is proof positive that the invoice price does not represent the genuine price. He relied on various prices referred to in the show cause notice. He submitted that in the case of imports from Romania the price list of 1982 of M/s. Techno Import Export was followed, however, the price-list issued in 1983/1984 show steep decrease in the prices. He quoted the bearings No. 6200 to 6215 where the price was Rs. 4.16 in 1982, Rs. 4.42 and Rs. 4.42 whereas price in 1983-84 was only Rs. 1.40 and Rs. 1.40. Therefore, the price does not represent genuine/true price of import in question. He also relied on the prices quoted in the telex to M/s. Amit Sales Corpn. which are as follows :
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Type DM Appx. Prices to India
DM 1 = Rs. 4.10 Rs. in 1984 (Rs.)
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6200-ZZ 1.64 6.72 2.02 6201-ZZ 1.72 7.05 2.15 6201-2RS 2.04 8.36 2.42 6202-2RS 2.53 10.37 2.66 6203-ZZ 2.14 8.77 2.55 6204-2RS 2.80 11.48 5.43 6206-2RS 4.19 17.20 4.17 6208-2RS 6.62 27.15 8.04 6300-ZZ 2.14 8.75 6305-ZZ 3.89 15.95 4.03 6306-2RS 6.10 25.00 5.89 6308-ZZ 9.10 37.30 10.16
17.2 He submitted that the above chart indicated the price much higher than the prices indicated in the 1984 price list and even higher than the prices indicated in 1982 price-list. He relied on the prices of certain ball bearings of Romanian origin procured by the President of Ball & Roller Bearings Manufacturers of India indicating Romanian export price for 1985 to West Germany, U.K., and Singapore.
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Symbol Price in Price to C1F (Rs.)
India
DM Rs. 1984 1983 1982
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1 2 3 4 5 6-------------------------------------------------------------------------
West Germany
6207 2.54 10.41 5.86 3.51 10.41
6208 3.12 12.79 6.72 4.03 11.96
6307 3.73 15.29 7.15 4.38 13.00
6308 4.74 19.43 9.94 5.43 16.12
U.K.
6200 1.02 4.18 1.86 1.40 4.16
6201 1.07 4.47 1.99 1.49 4.42
6204 1.43 6.86 2.79 2.01 5.98
6205 1.62 6.72 2.96 2.22 6.60
6206 2.16 8.86 3.72 2.79 8.27
6207 2.76 11.32 5.86 3.51 10.40
6208 3.38 13.86 6.72 4.03 11.96
6209 4.05 16.61 7.79 5.26 13.00
6305 3.32 13.61 3.97 2.78 8.84
6306 3.27 13.41 4.88 3.33 9.88
6307 4.04 16.56 7.15 4.38 13.00
6308 5.14 21.07 9.94 5.43 16.12
6309 6.37 26.12 12.51 8.00 19.76
6310 8.11 33.25 15.58 9.69 23.92
30203 2.53 10.37 4.21 3.16 7.80
30204 2.76 11.32 4.76 3.58 8.84
32211 8.58 35.18 14.14 9.48 23.40
32213 12.61 51.70 21.97 13.68 33.80
32307 7.15 29.32 10.12 7.37 18.20
Singapore
Series Singapore U.K. India India
1985 Rs. 1985 Rs. 1982 Rs. 1984 Rs.
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6200 4.00 4.18 4.16 1.86 6204 6.16 5.86 5.98 2.70 6205 6.50 6.72 6.60 2.96 6206 7.90 8.86 8.27 3.72 6207 9.60 11.32 10.40 5.86
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Relying on the above chart he submitted that prices at which the ball bearings are sold to West Germany, U.K. and Singapore by Romania were much higher than the prices at which Romania sold the ball bearings to the Indian importers.
18. Mr. Sunder Rajan also contended that the cost of the raw material is on the increase. Therefore, the price of the end product should simultaneously be increased. On the other hand the imports in dispute have shown a decrease in price. He relied on the following chart to compare the cost of raw material and production cost of certain ball bearings of Romanian origin for the period 1982,1983 and 1984.
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Bearing Type 1982 1983 1984 For finished bearings
appr. 1984 c.i.f. prices for
import in India
Rs. Rs. Rs. Rs.
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6204 2.41 2.61 2.79 2.79 6205 3.03 3.26 3.47 2.96 6206 4.17 4.67 4.87 3.72 6207 5.34 5.71 6.12 5.86 6208 6.96 7.54 8.04 6.72 6303 2.55 2.77 2.98 2.64 6304 3.32 3.63 3.86 3.15 6305 5.12 5.54 5.90 3.97 6307 8.31 9.05 9.72 7.15 6306 6.62 6.98 7.52 4.88 30309 8.95 9.37 10.11 7.38 32207 8.70 9.44 10.15 8.08 32211 15.30 16.62 17.94 12.73 32213 21.80 23.74 29.66 19.77 32307 13.23 14.02 15.06 9.11
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19. Shri Kantawala appearing on behalf of the majority of the appellants submitted that under Section 14(1) where duty is chargeable with reference to their value, the value of such goods shall be the 'price', therefore, Section 14 speaks of the price and not the value. It is next contended that Section 14 says that the price at which such or like goods are ordinarily sold or offered for sale for delivery at the time and place of importation. The place of importation being India the prices quoted to other countries are irrelevant. Therefore, the quotations to U.K., West Germany and Singapore are not relevant for the purpose of determining assessable value of Indian imports. Further, he submitted that in the absence of contemporaneous imports of the same kind and quality of the bearings, it is settled by a canlena of authorities that the invoice price should be accepted and it should alone be the basis for determining the assessable value. The appellants failed to produce in any evidence of contemporaneous imports of higher prices. In the absence of contemporaneous imports the allegation of under-valuation stands disproved. The various price lists to various other countries relied on are mere quotations. Quotations cannot be the basis for determining the assessable value of imported goods. Quotations on which the appellants relied upon are not offers from the suppliers of the impugned imports, and in pursuance of which no actual imports are made, and they have not culminated into a contract and the bearings Nos. are also different, therefore, these quotations are irrelevant.
20. The appellants contentions, it is submitted, relying on the cost of raw material that since cost of the raw material is on the increase the cost of bearings should also be increased is based on no evidence. No pricing is given and no particulars are furnished. The manufacture of a product depends on various factors like the availability of raw material, the market for the raw material, the cost of labour in manufacture of the product. There is no material at all as to how to arrive at the finding that since the cost of raw material has increased the cost of bearing should also increase.
21. It is next contended that the cost of manufacture of bearings by the local manufacturers cannot form the basis of the assessable value of the imported goods.
22. Mr. Krishnamurthy appearing on behalf of the 3 respondents while adopting the agruments of Mr. Kantawala, in addition submitted that before invoking Rule 8 of Customs Valuation Rules the appellants should first exhaust the other rules without which R(ule 8 cannot be invoked.
23. Mr. Jain appearing on behalf of the M/s. R.N. Agarwal & Co. and Continental Eastern Agencies while adopting the arguments of Mr. Kantawala submitted that they have imported bearings No. 6305, 6201. The importation has taken place under the indent of Pradeep Trading Corporation. The delegation from Romania accredited the Pradeep Trading Corpn. as one of their agent. He also submitted that the telex to M/s. Amit Sales Corpn. is not relevant as number of bearings are different. Similarly, the representation by the association is not relevant as number of bearings is different. He also submitted technocrat import telex relate to some other bearings. No show cause notice was issued and no telex is furnished to him, and the cost structure is not one of the grounds in the appeal. Therefore, it cannot be looked into.
24. In reply Shri Sunder Rajan submitted that the Collector has not applied his mind to the material before him at the time of passing order. The appeal is not beyond the scope of the show cause notice. Therefore, the Tribunal is competent to impose the penalty and requested that the Collector should be directed to determine the quantum of penalty.
25. Taking up the first contention of the appellants that they were not given opportunity to explain, and therefore, the order is ab initio void, we are of the view that the contention is opposed to the scheme of the Act. Section 122 read with Section 124 of the Customs Act does not provide for giving an opportunity to the deptt. in adjudication proceedings. The order relied upon by Shri Sunder Rajan reported in CC Bombay v. Walker Anjaria & Sons (P) Ltd. is not relevant to the facts of the instant case. Briefly the facts in the said case are, against the order of the Collector appeal was filed by the Revenue before the Tribunal. In the appeal the respondents filed a paper book to which the appellants objected on the ground that the paper book contained 23 documents which did not form part of the proceedings before the adjudicating authority. Challenging the contention of the DR an affidavit was filed by the respondents stating that the Collector who was to dispose of two cases, one relating to Jam Nagar Exports and another relating to Bombay Exports suggested that the Jam Nagar matter and Bombay matter may be amalgamated and at his instance the respondents have agreed to lead any further evidence in the matter of exports from Bombay but agreed to rely on the evidence, proceedings, arguments and submissions made in the matter of export from Jam Nagar to be used in the matter of export from Bombay. Ultimately, it was found that the Jam Nagar Export matter was disposed of by the Collector on the ground of limitation without going into merits. The Collector thereafter took up the matter relating to Bombay Export and relied on the evidence adduced in the Jam Nagar Export matter of which deptt. was not aware. Since the deptt. was not aware that the Collector was relying on the evidence and material adduced in the Jam Nagar Export matter in the porceedings relating to Bombay Export matter it was contended that the order of the Collector is vitiated. Accepting the contention it was observed that "we have already pointed out how there is no credible material to show that any decision was taken to amalgamate the two matters for adjudication. Having become functus officio in respect of Jam Nagar matter the learned Collector of Customs could not have made any use of evidence produced and arguments advanced in Jam Nagar matter for a decision of the Bombay matter. In that context this Tribunal held that the order of the Collector does not inspire confident and does not confirm to equity justice and goods consign." It was also held that Revenue did not have proper opportunity to substantiate its case. The facts of that case are entirely different from the facts of the present case. In the instant case on the basis of the complaint by Ball Bearings Mfg. Association an inquiry was made, searches were conducted, documents were seized. Some of the documents i.e. telex message quoting the price to M/s. Amit Sales Corpn. and also quotations furnished by the Ball Bearing Manufacturers Association i.e. Techno Import & Export, Romania and the other quotations from M/s. Rolf Weber & Co. West Germany to M/s. Ranchordass Purshotam & Co. were referred and relied on in the show cause notice and the Collector rejected all the 3 documents on the ground that they are mere quotations and the appellants failed to prove that these quotations resulted in concluded contracts or there were any actual imports in pursuance of the said quotations. He also observed that the quotation by M/s. Techno Import & Export, Romania is not relevant as it is an offer to third party country. Therefore, the contention that the appellants were not given any opportunity to substantiate their case is without any basis. We reject the same.
26. The main contention of the appellants is that the Collector erred in accepting the invoice price as the same is grossly undervalued.
27. Before examining the contention raised by the appellants it is necessary to refer to the relevant provisions of the Act, 1962 (hereinafter called as the Act).
The relevant portion of Section 14 of the Act reads as follows :-
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 -
(a) 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 or the sale or offer for sale :
28. The value under Section 14 is deemed value. It is deemed to be the price at which such or like goods are ordinarily sold....It is settled that invoice price need not necessarily be deemed value, [Calcutta Motor Dealers Association v. CC 1989 (42) ELT Page 693] "provided another international price available to all parties is normally exists" - In other words the appellants should be able to prove that the invoice price does not represent the price at which the goods are ordinarily sold, and it does not represent the price in the course of international trade and that it does not represent the price, as seller and buyer have interest in the business of each other and the price is not the sole consideration for the sale or offer for sale. It is also equally settled that the burden of proving the charge of undervaluation lies squarely on the deptt. The charge of under-invoicing has to be supported by an evidence of right kind of goods [Maheshwari Trading Corporation v. CC, New Delhi -1987 (29) ELT 739 (Tri)]; Walia Enterprises, Amritsar v. Collector of Customs [1987 (32) ELT 774]; CC v. Automotive International [1989 (44) ELT 325]; Orient Enterprises v. CC, Cochin [1986 (23) ELT 507]. It is also equally settled that in the absence of evidence of contemporaneous import of like kind of goods at higher prices the invoice price should be the basis for the assessable value under Section 14.
29. Let us now examine the charge of under-valuation and the material in sup-port-of the same and whether the appellants have proved under-valuation on the basis of the evidence available with them. The charge of under-valuation is based on, (1) quota-tions (telex message to Amit Sales Corpn. seized during the search of premises of Amit Sales Corpn.). These quotations are a telex message dated 30th January 1985 relating to the bearings from East European country issued by M/s. Theodar Lane & Co., D-2800 Bremon. The said quotation gives the price of bearings of eastern block countries like Poland, Czechoslovakia, Romania, Hungary which are at higher rate than the prices at which the impugned imports are made. (2) offer from M/s. Rolf Weber & Co. to M/s. R. Ranchordass Purshotum & Co. for various bearings of East European countries with their letter No. EXP/SCHE dated 25-1-1984, wherein the bearings of polish origin are offered for higher price. (3) In the case of imports from Romania a telex quotation offer during 1984 and 1985 made by M/s. Techno Import and Export Romania to a party in Singapore, U.K. and West Germany indicating higher prices for the ball bearings.
30. Admittedly, these are only quotations and offers. A quotation at a higher rate would not by itself show under-invoicing of the goods sought to be imported. For many reasons quotation may disclose higher rate. It is only after the quotations are accepted and contract is concluded and actual sale takes place, the price may then indicate whether there is a case of under-invoicing [Ghanshyam Chejra v. CC - 1989 (44) ELT 202]. Therefore, these instances of quotation relied on by the appellants would not lead to the inference of under-invoicing in the absence of evidence, that these quotations resulted in concluded contract and goods were actually imported in pursuance of the same. The appellants failed to adduce any evidence to prove that in pursuance of these quotations the parties have actually concluded the contract and the goods were actually imported. Therefore, we reject these quotations as leading to the inference of under-invoicing of the imported goods.
31. Further the appellants have also not adduced any evidence that the quality, brand, number and the quantity mentioned in these quotations are similar to the impugned imports. Therefore, the appellants failed to establish that there were contemporaneous import of similar goods at higher rate. Consequently the charge of under-invoicing the prices is not established.
32. The contention of the appellants relying on the quotation from M/s. Techno Import & Export, Romania to Singapore, U.K., West Germany that Section 14(1) contemplates price at which the goods are ordinarily sold in the course of international trade, therefore, the prices offered to Singapore, West Germany, U.K. are relevant as international trade means multinational trade and not bilateral trade is in our view devoid of any merit. The language used in.Section 14 is price at which goods are ordinarily sold for the delivery at the time and place of importation...in the course of international trade. The expression 'international trade' is to be read in the context of time and place of importation. The word import is defined under Section 2(23) in the following manner :
2(23) : 'Import' with its grammatical variation and cognate expression, means bringing into India from a place outside India.
33. So read international trade means bringing from a foreign country into the territory of India. A trade between India and foreign country is international trade but not intranational trade. The word intranational trade is used in contra-distinction with intranational trade. So understood, the prices quoted in the quotation referred to above apart from the reasons given above are irrelevant. This Tribunal [Mangla Bros. v. CC reported in 1984 (15) ELT page 151], under more or less similar circumstances held "that the letter of US firm showing prices of cassette tape for insignificant value for the reason that this can at best be treated as a letter of offer to interested parties for supply of goods mentioned therein but it is neither an indent nor an invoice and, secondly, this letter reference to the shipment from U.S.A. but we are dealing with goods imported from Japan; infact, not even a single importation of goods at the quoted prices has been shown to have taken place from U.S.A. at any port of India. Although proving a case of undervaluation is difficult as the evidence produced by the deptt. is not sufficient to pin down serious charge like under valuation against the appellants. Accordingly, goods have to be assessed to duty on the basis of value declared in the Bill of Entry for want of any proof of under-valuation therein."
34. The next contention that the prices of bearings, imported have been influenced by the consideration of enabling the importers to import a larger quantity of bearings against the same import licence in view of restricted import policy, and therefore, the seller and buyers are interested in the business of each other, and secondly the price is not the sole consideration is equally devoid of any merit. It is for the seller to decide at what price he should sell his goods taking into consideration various aspects of the business. If there is more demand and more supply, naturally the price will be reduced. It may be that the supplier is interested in selling more and the purchaser is interested in purchasing more and this fact alone does not lead to the inference that the supplier and the buyer are interested in the business of each other. It may be in view of the restricted policy that the suppliers are interested in importing more. But that does not automatically lead to the inference that the price is not the sole consideration. In this context we may refer to the order of this Tribunal in CC, Bombay v. Maruti Udyog Ltd. Gurgaon [1987 (28) ELT 390] where it was held that "there is nothing on record to show that dealings between Maruti and Suzuki are not at arms length or that the price charged by Suzuki SKD/CKD packs and complete vehicle from Maruti is not fully commercial one, even though, as per the deptt.'s contention, Maruti was the only buyer. Therefore, the price charged was to be treated as one at which the goods were ordinarily sold or offered for sale". In the present case also there is no evidence on record to show that the dealings between the suppliers and the importers are not at arms length. There is also no evidence to establish that the price at which the goods are ordinarily sold is higher.
The contention that invoice price is influenced by the restricted import policy, and therefore, the price is influenced by extra commercial consideration is devoid of any merit. The import policy will certainly have a bearing on the import and exports to be made into India and out of India. The nature of the import policy cannot be treated as an extra commercial consideration and the price at which the goods are imported for that reason cannot be treated as not the sole consideration for the sale.
34.1 In our view in the absence of evidence that the respondent remitted to the foreign supplier more than what is indicated in the invoices, or that there are contemporaneous sale at higher price or that the sellers and buyers are interested in the business of each other, the nature of the import policy cannot be treated to be an extra commercial consideration to discard the invoice price.
35. The agruments of Shri Sunder Rajan relying on various prices referred to in paragraph 17- that there is a sleep rise in the price of ball bearings and therefore, lower price indicated in the invoice price of the relevant imports does not represent the genuine price in case of import from Romania is without any basis and is liable to be rejected. The price referred to and relied upon in the show cause notice relate to ball bearings number 6305 to 6310,30203, 30204,3211, 32213,30309,6207,6208, 6307,6308, 6204 whereas the ball bearings imported now are bearings Nos, 6215 k, 6213,6214,6302 under bill of entry No. 1254/112, bill of entry No. 1254/82, bill of entry No. 1254/104. Therefore, the prices quoted by the Ball bearing Manufacturers Association relying on cost of material and the quotations to West Germany, U.K. and Singapore are not relevant as they do not relate to the ball bearings number imported. Similarly, the telex message to Amit Sales Corpn. does not relate to ball bearings number imported from Romania.
36. Taking up the imports from Poland the proposal in the show cause notice is that in 1979 the prices list was issued and again in 1982 price list was issued. In 1982 price list were lower than the prices mentioned in 1979, and therefore, the price in 1979 should be reduced by 25% as 1982 price list is not applicable for the imports made in 1984. On the face of it the approach of the appellants is most unreasonable and irrational. The appellants admit that there is a decline in the price from 1979 to 1982 instead of taking the price of 1982 which is more proximate and reducing it, the appellants proposed to take 1979 prices and reduced it by 25% on the ground that 1982 price list is not applicable to 1984 imports. It is not clear how if 1982 price list is not applicable, 1979 price list can be applied by reducing it to 25%.
37. Therefore, there is absolutely no basis for the proposal made in the show cause notice as approach of the appellants is unreasonable as stated in the earlier paragraphs in the absence of contemporary imports. We agree with the Collector that the invoice price alone should be the basis for making the assessment.
38. The next item relates to imports from Hungary. The show cause notice proposes to enhance the prices on the basis of 1983 price list. The relevant portion of the show cause notice-reads as follows :
"On the basis of foregoing facts it appears that the value of the goods as declared in the invoice is not acceptable under Section 14(1) (a) of the Customs Act, 1962. The value of the goods has arrived under Rule of Customs Valuation Rules 1963 read with Section 14(1)(b) of the Customs Act, 1962 as shown in An-nexure 'A' the prices for the purposes of valuation under Section 14(1)(b) are taken as per 1983 price list for Hungary bearings." Whereas in the appeal the proposal is to enhance the value of the imported goods, on the basis of 1981 price list. The relevant portion of the appeal reads as follows :
"The assessable value of the goods should have been determined on the basis of the manufacturer's 1981 price list."
In our opinion the appellants cannot be permitted to set up a new case at the appeal stage. Therefore, we accept the finding of the Collector that the invoice price should be accepted in respect of the imports from Hungary.
38A. We agree with Mr. Kantawala that there is no material to prove that in fact there is increase in the cost of raw material, and therefore, the cost of bearings should also be increased. We also agree with him that it depends on various factors in the absence of which we cannot accept the contention of the appellants.
39. We are also of the opinion that the suppliers are various government organisations of the countries from where the goods are imported. It will be improper to assume that the price confirmed by the official suppliers did not disclose the true price. [Jayaram Dass KJmsiram v. CC, Bombay (CEGAT's order No. 302/84-A dated 14th May, 1984].
40. In other respects we agree with the Collector and confirm his order.
41. In the light of the foregoing we feel no merits in the appeals and accordingly, we dismiss them.