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2. The petitioners, to carry on the business as manufacturers and dealers in cutlery, are regularly importing the necessary raw materials required for the manufacture of cutlery. By a contract dated July 21, 1969 entered into between the petitioner No. 1 and one Mitsui & Company Limited, Japan, an order for import of 115 Metric tonnes of prime quality stainless steel sheets in coils at the price of U.S. Dollars 878.40 per metric tonne c.i.f. was placed. The petitioner No. 1, in order to be entitled to grant of requisite import licence, booked a firm export order for supply of stainless steel cutlery of the value of U.S. Dollars 204560.00 with one Messrs Bloomfield Industries Inc., Chicago, U.S.A. The said concern from the United States of America established in favour of the petitioner No. 1 an irrevocable letter of credit dated September 17, 1969. The petitioner thereafter received a Proforma Invoice dated October 29, 1969 from Mitsui & Company Limited showing price U.S. Dollars 878.40 per metric tonne c.i.f. Bombay. The petitioners thereafter made necessary application to the respondents for issuance of import licence to meet the export commitment. The Chief Controller of Imports and Exports, New Delhi, advised the Joint Chief Controller of Imports and Exports, Bombay, to issue import licence for the quality, chemical composition and the rate of stainless steel as covered by the Proforma Invoice dated October 29, 1969. The petitioners were thereafter granted the import licence on January 13, 1970.

6. Shri Rana submits and, in my judgment, with considerable merit that the authorities below have missed the substance of the matter and have proceeded upon a wrong assumption. The contract was confirmed by M/s. Mitsui & Company Limited on July 21, 1969 and the copy of the contract is annexed as Ex. 'A' to the petition. The perusal of this exhibit makes it clear that the price agreed was U.S. Dollars 878.40 and the buyers have to open a confirmed, irrevocable Letter of Credit in U.S. Dollars and the same was to reach Tokyo, Japan by August 30, 1969. In accordance with this contract, M/s. Mitsui & Company Limited, through their Bombay Agents, handed over a Proforma Invoice to the petitioners and the copy of this proforma invoice is annexed as Ex. B to the petition. The price mentioned in this proforma invoice is identical as that mentioned in the Contract of July 21, 1969. The proforma invoice, inter alia, recites as follows :

"We may state here that this order has been booked by you since long, but you have not been able to open the letters of credit covering the above quantity and as such, even though our Principals are keeping the order valid, they have informed us that the prices of the materials will be charged to you as ruling at the time of shipment and hence, in order to avoid such situation, we request you to kindly expedite establishment of letters of credit under advice to us."

After receipt of the proforma invoice, the petitioners sought an advance licence and the same was granted and the copy of the licence is annexed as Ex. "B collectively". The perusal of the licence indicates that the petitioners were permitted to import 164 metric tonnes of stainless steel sheets for manufacture and the import was to be in conformity with the types, specifications, weights and price as given in the proforma invoice dated October 29, 1969. The conditions attached to the licence establish that the advance licence was granted to the petitioners as actual users and registered exporters and was on condition that the petitioners would export only quality stainless steel cutlery as covered by the export order in favour of M/s. Bloomfield Industries Inc. - Chicago, U.S.A. After securing the licence, the petitioners received a confirmation letter dated November 29, 1969 from M/s. Mitsui & Company Limited and the copy of that confirmation letter is annexed as Ex. 'C' to the petition. This confirmation letter also states the price of the imported goods at U.S. Dollars 878.40 per metric tonne. Shri Rana submits that the authorities below have proceeded on the assumption that the confirmation letter dated November 29, 1969 is a fresh contract and the eight consignments which reached Bombay between April 1970 and June 1970 were imported on the strength of the Contract dated November 29, 1969. The assumption of the authorities on this aspect is entirely erroneous. What M/s. Mitsui & Company did on November 29, 1969 was merely to confirm the contract to sell the stainless steel sheets in coil at the stated price. This confirmation was of the contract entered earlier in July 1969 and the price in both the documents is identical.

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

The material available to the authorities in the present case was more than sufficient to hold that the goods were sold to the petitioners in accordance with the Contract dated July 21, 1969 and it is an accepted position that the price prevalent on that day was U.S. Dollars 878.40 per metric tonne. Under Section 46(4) of the Act, the importer has to present the bill of entry and is required to make a declaration at the foot thereof as to the truth and contents of the bill of entry and in support of such declaration is required to produce the invoice relating to the imported goods. The petitioners have produced the proforma invoice, on the strength of which the advance licence was granted. In my judgment, on the facts and circumstances of the case, the finding of the authorities below that the price prevalent was U.S. Dollars 1170 per metric tonne on the date when the consignments were shipped and the petitioners are liable to pay excess duty is entirely untenable and unsustainable. The authorities below have overlooked that the advance licence to registered exporter is granted on the condition that such importer would export finished items at the stated value and secure foreign exchange. In my judgment, in these circumstances, the orders of the three authorities below are required to be quashed.