MARK AUTO INDUSTRIES LTD. Vs. C.C.

JUDGEMENT

(1.) M /s. Mark Auto Industries Ltd. is a manufacturer of fuel (automobile) tanks for Maruti Udyog Ltd. They import 'Terne Steel Sheet' for manufacture of the fuel tank. In 1999, they entered into a long -term purchase agreement with British Steel Corpus, UK, for the purchase of the 'Terne Steel Sheet'. The period of supply was to be spread over 18 months from March 1999 to March 2001, taking into account the contracted volume of 3000 MT. The quantity, price and period to supply fixed under the contract were as under:

(2.) THE imports started arriving in terms of the contract from November 1999. Till April 2000, consignments under 20 Bills of Entry were assessed and cleared through the Customs at the contracted transaction value. However, dispute about valuation was raised by Customs in April 2000. The reason was that another importer, M/s. Rasandik Engineering Industries India Ltd. started importing identical goods from M/s. British Steel Corpus, U.K. at higher value of 718 US per MT. The appellant sought to defend their lower transaction value for the purpose of assessment of the goods stating that the appellant was importing much higher quantity than the new buyer and that the appellant has negotiated transaction price which is liable to be accepted for assessment of the goods imported by them in terms of Section 14(1) of the Customs Act and Rule -4 of the Customs Valuation Rules. The Deputy Commissioner of Customs, ICD, Tughlakabad, New Delhi rejected the appellant's contention, noting that the importer had failed to submit the details of the negotiation and that the "prices agreed due to competitive global reduction in steel price "were not the prices in the ordinary course of international trade". However, in view of the fact that M/s. Rasandik Engineering Industries India Ltd. imported 1000 MT of steel during 1999 -2000, a lower quantity than the quantity ordered by Ms/ Mark Auto Industries Ltd., the Deputy Commissioner allowed discount at the rate of US 15 PMT of import above a quantity of 1000 MT. Accordingly, the Deputy Commissioner ordered the assessment of the goods including those already imported and waiting to be imported by the appellant in future, at the assessable values indicated in the Table to the Order. That Table and direction of the Deputy Commissioner are reproduced below:

(3.) M /s Mark Auto Industries Ltd. challenged this order before the Commissioner of Customs (Appeals). It was submitted that Deputy Commissioner could no have reopened the assessments already made under 20 Bills of Entry without issue of Show -case Notice as provided in Section 28 of the Customs Act. It was also pointed our that the Deputy Commissioner could not have fixed the future assessable value in advance for the goods yet to be imported. With regard to the 9 Bills of Entry relating imports during the period of the proceeding the appellant contended that those goods were eligible to be assessed to duty at the transaction value covering the transaction and not at the transaction value of another importer.