VARSHA PLASTIC PVT. LTD. Vs. COMMISSIONER OF CUSTOMS

JUDGEMENT

(1.) ALL these appeals are directed against the same impugned order. Therefore, they were heard together and are disposed of by this common order.

(2.) THE subject proceedings relate to dispute on the Customs valuation of 100 MT of Sodium Hydrosulphite and 200 MT of Citric Acid imported by M/s. Varsha Plastic Pvt. Ltd., Kandla. The declared value for assessment of the goods was US 600 per MT in respect of Sodium Hydrosulphite and US 785 per MT in respect of Citric Acid. Pursuant to investigation by Directorate of Revenue Intelligence, Show Cause Notice dated 20 -10 -1997 was issued alleging that the goods had been undervalued. Even though the appellants contested the allegation, the impugned order was passed by Commissioner of Customs, Kandla increasing the assessable value of sodium hydrosulphite to US 800 per MT and that of citric acid to US 935 per MT. The assessable value was increased on a finding that same goods were imported at higher value and that Shri Shantilal Jain, Director of the importer company had confessed to under -valuation of the goods. The order also rejected the submission of the appellant about comparable value. The contention of the appellant was all through was that the declared value represented full transaction value and that there is no misdeclaration involved. The appellants have refuted the finding that Shri Shantilal Jain had admitted to the under -valuation of the goods. It is also pointed out by the appellants that they had produced copies of Bills of Entry along with invoices showing that the citric acid had been imported at US 705 MT, lower price than the appellants by M/s. Hardik Industrial Corporation, Bhavnagar under Bill of Entry No. 02947, dated 25 -3 -1997. Similarly, the price for Sodium Hydrosulphite imported by the same importer under B/E No. 02948, dated 28 -3 -1997 was US 605 MT, again lower than the import price of the appellant. The appellant's submission regarding comparable value has been rejected in the impugned order on the ground that those assessments were endorsed as provisional and for that reason, they cannot be accepted as evidence in support of contemporaneous import. The comparable value taken by the Customs authorities was also contested as inappropriate by the appellant on the ground that the quantities under import by those parties was very small. As against 200 MT of citric acid and 180 MT of Sodium Hydrosulphite imported by the appellant quantity under import was only 20 MT. It is their contention that large quantities imported by them should be the reason for their being offered a lower price than the price of others. The appellant's explanation about quantity difference has been rejected in the adjudication order stating that appellant had not put forth the quantity discount explanation earlier in investigation proceedings and therefore, that submission cannot be accepted.

(3.) DURING the hearing of the appeals, learned Counsel for the appellants emphasised that the entire proceedings in the present case are contrary to the settled legal position Eicher Motors Ltd. v. UOI - 1999 (106) E.L.T. 3 (S.C.) that transaction value should the basis for customs valuation and assessment to duty. Learned Counsel also referred to the decision of the Apex Court in the case of Mirah Exports v. Collector - 1998 (98) E.L.T. 214 (S.C.) that the reduced price for a buyer is not to be rejected unless price actually paid is vitiated by the buyer and the seller being related or price being not the sole consideration. Learned Counsel has also emphasised that Revenue authority have not passed an order relying on the relevant data about contemporary price either. He has pointed out that the data produced by the appellant about import at a comparable price by Hardik Industrial Corporation has been rejected merely stating that the assessment was provisional without indicating the final value adopted for assessment. Learned Counsel also took us through the statement of Shri Shantilal Jain to show that Shri Jain had always maintained that the declared price was the full transaction value.