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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;

(b) where such price is not ascertainable, the nearest ascertainable equivalent thereof determined in accordance with the rules made as this behalf."

5. The main thrust of the arguments of the learned Solicitor General before us was that the price for the sale of CKD packs by the foreign collaborator to the respondents is not the true price. In other words, the price fixed or mentioned in the invoices was not the sole consideration for the sale of CKD packs, for the various reasons stated by the Assistant Collector in his order. According to the learned Solicitor General, the price mentioned in the invoices was (or should have been) determined by taking into consideration the lumpsum of 15 million French Francs (nearly three crores of Rupees) paid by the respondents to the foreign collaborator under the agreement. It is on this basis section I4(l)(a) was excluded and resort to section 14(l)(b) of the Customs Act was sought to be justified by the revenue. In appreciating the above plea we have to bear in mind certain basic principles. The bargain between the respondents and the foreign collaborator is evidenced by written agreements, (dated 6,11.1979 & 6.3.1980). There is no material nor was it suggested that the dealings between the parties are not at arm's length. No evidence is available to show that the payment of royalty to the collaborator induced any extra commercial obligation for the price of CKD packs, parts and components. Ordinarily the Court should proceed on the basis that the apparent tenor of the agreements reflect the real state of affairs. It is, no doubt, open to the revenue to allege and prove that the apparent is not the real and that the price for the sale of the CKD packs is not the true price, and the price was determined by reckoning or taking into consideration the lumpsum payment made under the collaboration agreement in the sum of 15 million French Francs. The short question is whether the revenue has succeeded in showing that the apparent is not the real and that the price shown in the invoices does not reflect the true sale price and so section 14(l)(b) of the Act was properly invoked.

6. Certain aspects highlighted by the learned Solicitor General to prove that the price of CKD packs mentioned in the invoices is not the true price are as follows: The collaboration agreement dated 6.11.1979 is an indivisible and composite one. The agreement should be read as a whole. The technology for the assembly of the engine is necessary and is included in the agreement. The price of technology 'to assemble' is really a part of the bargain and is included in the composite agreement. The foreign collaborator who retained the industrial property rights relating to the engine exclusively permitted the respondents to use the same in India and the consideration therefor is also included; but for this, the respondents cannot use the property at all and the supply of CKD packs and service parts to the respondents was only one of the aspects covered by the bargain, and the apparently sizeable amount paid (consideration shown) as per the agreements could only be by reckoning the supply of CKD packs and the service parts in the future. In the circumstances, the consideration mentioned in the agreement should cover, at least in part, the price of the CKD packs and spares that may be supplied later, though it is not expressly stated so. It may even include an element of payment of royalty for the products.

7, Oil the other hand, counsel for the respondent Sri Setalwad laid emphasis on the following: The High Court has concurrently found that the respondent and the foreign collaborator had no interest in the business of each other and the said finding is not assailable in this appeal especially in view of the conditions under which special leave was granted by this Court. The CKD packs and spares were supplied by the foreign collaborator to the respondents at the same price at which they were sold to others and the agreements did not provide for any concession to the respondents - buyers. In other words, the price charged by the foreign collaborator for the supply of CKD packs and spares and other articles is uniform. The payments under the agreements were made by 1981, and the import of CKD packs and spares started later in 1982. It was only two years thereafter, for the first time on 12,6.1984, the customs authorities intimated the respondent that they will load the invoice value. Finally, more than 3 years after the import of the goods, the goods were loaded at 1.5%, arbitrarily and without any basis. The technical know-how of every machine (in the instant case, the engine) will include 'assembly' and there is nothing unusual in the collaboration agreement which provides for manufacture of the engine, for the supply of the necessary know-how for the assembly thereof. Indeed, Clause A(4) of the main agreement provides "for manufacture of an engine with 100% indigenous contents in India." What is more, under Clause F 1-3, the option vested with the respondents, to import the whole or any part of the materials, including CKD packs and spares etc. There is no material to indicate any nexus or connection between the lumpsum payment of 15 million French Francs and the supply of CKD packs to the respondents by Peugeot for the production of the engine. No material has been adduced by the Revenue to demonstrate that the price fixed in the invoices is not the true or the real price, or in other words, the apparent is not the real. In no sense, it can be stated that the price of the goods obtained later was reckoned or reflected in the lumpsum payments made, long before. The parties never had in mind the nature and extent of the spare parts that may be required later, when the collaboration agreement was entered into. The inference so suggested to be drawn is arbitrary, and ad hoc and has no foundation.

8. On an evaluation of the relevant clauses in the collaboration agreements and the attendant circumstances, we are of the view that the concurrent Judgments of the High Court at Bombay do not merit interference in this appeal. The crucial aspects appearing in the case are that the parties were dealing at arm's length, that the seller and the buyer have no interest in the business of each other, that, ordinarily, the technical know-how of the machine can take in 'the assembly' thereof, that the CKD packs and spares were supplied to the respondents by the collaborator not at a concessional price but at the price at which they were sold to others, that, as agreed to by the respondents, the option was entirely with the respondents to order the parts as per their requirements, that there was no obligation on the respondents to purchase CKD packs at all, that long before the supply of the CKD packs and spares, the royalty due to the collaborators was paid, that there is no material to show that the supply of the CKD packs or spares weighed with the parties in fixing the payments under the collaboration agreement but, on the other hand, the collaboration agreement for the technical know-how and the supply of CKD packs and spares are independent commercial transaction; in other words, there existed no nexus between the lumpsum payment under the agreement for the technical know-how and the determination of the price for supply of CKD packs or spares. It is by highlighting the above aspects that the learned Single Judge and the Division Bench concluded that "the contention that the price quoted in the invoices tendered by Mahindra & Mahindra (respondents) does not reflect the correct price because a part of the value of imported packs and components was already received by foreign collaborator while determining the consideration of 15 million French Francs cannot be accepted", and "the collaboration agreement does not support the claim nor was there any material available to the Assistant Collector to warrant such a conclusion", and, therefore, resort to section 14(l)(b) of the Act and Rule 8 of the Customs Valuation Rules is clearly incorrect and unsustainable and the "Assistant Collector was bound to accept the price mentioned in the invoices for the purpose of assessing the customs duty".