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(1) Polystyrene General Purpose - US $ 600 PMT CIF. (Wide Spec) (2) Polystyrene High Impact - US $ 640 PMT CIF. (Wide Spec) However, he dropped the penalty proceedings observing that it cannot be conclusively held that the Importers knowingly misdeclared the value and there is no evidence to hold that they consciously manipulated lower price covering imported goods in question.

3. We have heard Shri L.P. Asthana and Shri Pradeep Jain, learned Counsels for the Importers'/parties and Shri A.K. Singhal, learned JDR for the Revenue.

4. Arguing for the Assessee, Shri Asthana submitted that there has been no mis-declaration of description of goods or of value to reject the transaction value. The Collector in his order has given a clear finding that goods were not of prime quality and neither the importers have knowingly misdeclared the value, nor evidence to hold that they manipulated the lower price of the goods in question. Since the transaction was genuine and at arm's length department was not justified in rejecting the transaction value and transaction value cannot be rejected in the facts and circumstances and in support of his contention he cited the following decisions :-

5. Shri A.K. Singhal, learned JDR for the Revenue submitted that importers had imported two types of material viz., Polystyrene General purpose grade and Polystyrene high impact Grade. General purpose grade and high impact grade are themselves grades as can be seen from the invoice but parties declared Wide Spec as grade to confuse the Department and Collector also misled by this Wide Spec as 'off grade' and arrived at the conclusion that there has been no misdeclaration in description of the goods. The opinions given by (i) Prof. M.K. Trivedi from LIT. Bombay, (ii) M/s. Hico Products Ltd., Bombay and the Department of Chemical Technology, University of Bombay, Bombay substantiate that there is nothing like Wide Spec material in Polystyrene and there is no grade as such and Shri Shantilal J. Jain common Director of both the Companies M/s. Pushpak Plastics Pvt. Ltd., and M/s. Varsha Polyproducts stated in his statement that Wide Spec was not technical but a commercial term; that polystyrene was sold with main grade such as General GPPS and HIPS grade depending upon quality, but in spite of this fact the finding of the Collector is otherwise on this issue. He said that imported items cannot be considered as low grade and since there has been misdeclaration of description of goods and value thereof, the Department was justified in rejecting the transaction value and determined the value under Section 14IA of the Act with reference to Valuation Rules. He said that they have misdeclared the description of the goods and shown the uniform rate for different grades and in the circumstances the rejection of transaction value was justified relying upon the decisions in the case of Maya Enterprises v. Collector of Customs, Kandla, reported in 1994 (71) E.L.T. 817 (Tribunal) and Plaza Steels & Alloys Ltd., v. Collector of Central Excise, New Delhi reported in 1993 (68) E.L.T. 213 (Tri.). He also referred to the decision in the case of Crescent Corporation, Calcutta v. Collector of Customs, Calcutta - 1992 (41) ECR 444 wherein it was held that where the declared CIF price was far less than the value of the comparable goods, the declared .CIF price cannot be deemed to be the transaction value under Rule 4 of the Customs Valuation Rules, 1988 and it has been further held that determination of the value under Rule 8 of the Customs Valuation Rules was permissible even though in the show cause notice Rule 5 was invoked. He contended that Collector was not right in dropping the penalty in spite of his finding that importers were guilty of misdeclaring the value and there has been variation in declared value and value assessed. Alternatively, he requested that matter may be remanded to the Collector to decide the issues afresh.

In view of the technical literature and opinions the Collector has clearly analysed that while attempting a prime quality graded material each manufacturer does not reach the fine quality on day one but through sustained trial/error method over a certain period that the quality of desired grade is obtained and what is produced until then sold as Wide Spec/Off Grade. Similarly for various marketing needs specifications are changed for graded material, the same exercise of experimentation is required to be gone through before obtaining perfection. What does not conform to 'Spec' cannot be sold as standard/primary graded material, as each manufacturer has his own reputation at stake. It is, therefore, not in dispute that the price charged for primary/graded material is higher than that of sub-standard/off grade/Wide Spec material. Further evidence placed on record that invoices of M/s. Polychem Ltd., Bombay showing clearances of polystyrene which categorically described the product viz., polystyrene sub-standard and off grade establishes that the sub-standard and off graded materials are being sold by the Indian manufacturers of Polystyrene also at a lower price as compared to the graded products. In the facts and circumstances of the case, we concur with the finding given by the Collector that importers have not misdeclared the description of the goods. Next question arises whether sufficient evidence was brought on record to discard the transaction value. Transaction value can be rejected if there has been a misdeclaration of the description of the goods or price declared by the importers were much lower than the contemporaneous price at which identical goods or similar goods were sold in the international trade at the relevant time with reference to the amended Section 14(1) of the Act. In other words invoice value must be accepted when there is no evidence of sales at higher prices, mutuality of interest, extra-commercial consideration and dealings are normal. There is no evidence in this case that transaction was not genuine or of extra-commercial considerations. In the circumstances only point to be considered is whether similar goods were sold at higher prices at the relevant time. There is a clear finding by the Collector that contemporaneous price of identical goods is not available. Even we do not find any evidence to show that similar goods were imported at the relevant time. It is settled that burden lies on the Department to prove under-valuation. Sufficient evidence must be brought on record to show that the declared price of the imported goods was far less than the price of the similar goods imported at the relevant time. Goods should be compared with that of identical goods or of similar goods and quantity should be substantially same. Since such evidence is not forthcoming the transaction value cannot be rejected and it should be accepted as envisaged under Rule 4 of the Valuation Rules. The Adjudicating Authority has not pointed out any of the circumstances set out in Rule 4(2) or 4(3) of the Valuation Rules, 1988 to discard the transaction value. The only reason given is that price of graded polystyrene imported during the period was higher than the price of the imported goods and there is no much quality difference between the Wide Spec polystyrene and regular graded polystyrene. In view of the clear finding that quality of imported goods was inferior to the prime quality of polystyrene or graded material, we are of the view that same cannot be compared since it cannot be said to be contemporaneous evidence. We also take note of the submissions made by the learned Counsel for the appellants that price of prime quality of goods started from US $ 600 and goods of prime quality imported from Russia in the case of Priya Plastics wherein goods were described as of CIS origin and the price quoted was US $ 650 by a Hong Kong supplier for shipment from Singapore and these were not considered by the Adjudicating Authority in determining the value. In the facts and circumstances of the case, we hold that there was no justification either for enhancement of transaction value or to impose penalty. All these four appeals are disposed of accordingly.