IN THE SUPREME COURT OF INDIA
Kuldip Singh, N.M. Kasliwal and S.P. Bharucha, JJ.
PADIA SALES CORPORATION
Versus
COLLECTOR OF CUSTOMS
Civil Appeal No. 3545 (NM) of 1992 decided on 18-3-1993
Valuation (Customs) - Specially quoted price not acceptable when suppliers published price list showing the price to be far higher - Section 14 of Customs Act, 1962. -
The fact that the trade representative of USSR in his
letter dated January 20,1987 has asked the appellant not to divulge the
specially quoted price to any other party in India, in itself indicates that the
price offered to the appellant was a special price and not the ordinary price of
such goods in the course of international trade. The price in the ordinary
course of international trade has been indicated, in the price list published by
the manufacturers in USSR. We, therefore, find no ground to interfere with the
order of the Tribunal. We agree with the reasoning and the findings reached
therein. [paras 3, 4, 5, 6]
REPRESENTED BY: Shri Soli J. Sorabjee, Sr. Advocate, for the Appellant.
[Judgment per : Kuldip Singh, J.]. - M/s. Padia Sales Corporation, Delhi, (“The
Corporation’) imported a consignment of seventy five pieces of bearings called
”GPZ Brand roller bearings No. 10777/670" from USSR and declared the total CIF
value as Rs. 7,51,030/-, at the rate of Rs. 50,000/- per bearing. The
Corporation further sought the clearance of the consignment under Open General
Licence (OGL) in terms of the Import Policy 1985-88. On verification it was
found by the Customs Department that the price of the bearing per piece was Rs.
1,79,631.76 and not Rs. 50,000/- as claimed by the Corporation. It was further
found by the Department that the goods could not be cleared under OGL and as
such the goods were liable to be confiscated under the Customs Act, 1962 (the
Act). Accordingly, a show cause notice dated March 18,1988 was issued to the
Corporation alleging under-valuation to the extent of Rs. 28,37,432/- and
further for the confiscation of the goods on the ground of mis-declaration. The
case was adjudicated by the Collector of Customs, Bombay and by his order dated
July 14,1988, he enhanced the value of the imported bearings from Rs. 50,000/-
to Rs. 1,79,631.76 per piece and further confiscated the bearings under Section
111(d) read with Section 111(m) of the Act. The Corporation was, however, given
an option to redeem the goods on payment of Rs. 10,00,000/-. The appeal filed by
the Corporation before the Customs, Excise and Gold (Control) Appellate Tribunal
(the Tribunal) was allowed and the matter was remanded to the Collector of
Customs, Bombay, for fresh adjudication in the light of the correspondence
produced by the Corporation on the record. The Collector by his fresh order of
March 27,1991, reiterated his earlier order except that the redemption fine was
reduced from Rs. 10,00,000/- to Rs, 2,50,000/-, penalty of Rs. 50,000/- was
imposed on the Corporation and it was held that Section 111(m) of the Act was
not attracted to the facts and circumstances of the case. The Corporation
challenged the order of the Collector before the Tribunal. The Tribunal accepted
the contention of the Corporation that the goods were covered by the OGL and as
such the order of confiscation under Section 111(d) of the Act was set aside,
consequently the redemption fine of Rs. 2,50,000/- was also set aside. The
Tribunal also accepted the contention of the Corporation that on remand the
Collector had no authority to impose the penalty of Rs. 50,000/-. The Tribunal,
therefore, set aside the penalty imposed by the Collector. So far as the price
of the imported goods was concerned, the Tribunal on reappreciation of the
evidence on the record came to the conclusion that the Corporation had
under-invoiced the price of the goods and the Collector had rightly fixed the
price per bearing at Rs. 1,79,631.76. The Tribunal, thus, partially accepted the
appeal of the Corporation but dismissed the same on the question of valuation of
the goods. This appeal by the Corporation under Section 130E of the Act is
against the order of Tribunal.
2. We have heard Mr. Soli ]. Sorabjee, learned Senior
Advocate for the appellant-Corporation. He contended that the invoiced price was
a result of contract between the supplier and the appellant entered into after
negotiations. No special treatment was given to the appellant by the supplier.
The learned counsel invited our attention to various letters placed on the
record and taken into consideration by the Tribunal. The learned counsel for the
respondent, on the other hand relied upon the letter dated January 20,1987, to
show that the price offered to the appellant was a special price. In addition he
placed strong reliance on the printed price list issued by the manufacturers
which showed the value of the imported bearing as Rs. 1,79,631.76 per piece.
3. The Collector of Customs, Bombay, on the basis of the
material produced before him came to the conclusion that the invoiced price of
the imported goods was not acceptable. The Tribunal, in appeal, independently
depreciated the evidence and came to the same conclusion. We do not find any
infirmity in the concurrent findings of the authorities under the Act.
4. We have been taken through the order of the Collector and
of the Tribunal. We have also examined the correspondence placed on the record.
The trade representative of the USSR in India in his letter dated January
20,1987, addressed to the appellant-Corporation stated “Please, note that these
prices are specially quoted for you and therefore the same are not to be
divulged to any other party in India”. Apart from that the printed price list
issued by the manufacturers specifically quotes the value of the imported
bearings at Rs. 1,79,631.% per piece. The Collector and the Tribunal have
primarily based their findings on these two documents.
5. Section 14 of the Act provides that the value for the
purpose of assessment would be :-
(a) the ordinary price at which the goods are sold or
offered for sale;
(b) price for delivery at time and place of
importation;
(c) price in the ordinary course of international trade
between the unrelated buyers.
6. The fact that the trade representative of USSR in his
letter dated January 20,1987 has asked the appellant not to divulge the
specially quoted price to any other party in India, in itself indicates that the
price offered to the appellant was a special price and not the ordinary price of
such goods in the course of international trade. The price in the ordinary
course of international trade has been indicated in the price list published by
the manufacturers in USSR. We, therefore, find no ground to interfere with the
order of the Tribunal. We agree with the reasoning and the findings reached
therein. We also endorse the wish and hope entertained by the Tribunal in Para
3.3 of its order regarding heavy demurrage.
7. The appeal is dismissed. No costs.
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