KISHCO CUTLERY LTD Vs. UNION OF INDIA

JUDGEMENT

(1.) A Company known as Kumar Brothers (India) Private Limited was incorporated under the provisions of the Indian Companies Act, 1913 and was carrying on business as manufacturers and dealers in cutlery. The said Kumar Bros. (India) Pvt. Ltd. carried on business in the name and style of Kishco Cutlery Manufacturing Company and on September 10, 1973 by resolution, the name of Kumar Bros. (India) Pvt. Ltd. was changed to Kishco Cutlery Pvt. Ltd. On October 30, 1975, Shri K. G. Nariman and Ravi Nariman being the only shareholders of the Company transferred all their shares to one Shriyans Prasad Jain and others and thereafter the petitioner No. 1 Company became a deemed public company under the provisions of the Companies Act, 1956.

(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.

(3.) Between April 4, 1979 and June 18, 1970, eight consignments under the contract dated July 21, 1969 reached Bombay and the petitioners submitted all the necessary documents like the bill of entry, proforma invoices and other documents to the Customs Authorities for clearance of the consignment. The contract price of Rs. 878.40 per metric tonne was reflected in the invoice accompanying the said consignments and the same price was also mentioned in the bills of entry. The Officers of the Customs Appraising Department assessed the value of the goods as being U.S. Dollars 1170 per metric tonne instead of the price of U.S. Dollars 878.40 per metric tonne mentioned in all the relevant documents. The petitioners were thus compelled to pay the excess customs duty.