THIRD MEMBER ON REFERENCE : DR. S.N. BUSI, MEMBER (T) WESTERN IMPORTERS CORPORATION Vs. COMMISSIONER OF CUS., KOLKATA

JUDGEMENT

(1.) BRIEFLY stated the facts of the case are as under : - 1. On or about 1 -6 -1992, the appellants placed Order on their foreign supplier, M/s. Janis Inc., New York for supply of spares of Earth Moving Equipments/Machinery. The goods were despatched by the foreign supplier on 1 -7 -1992 and invoice dated 2 -7 -1992 was raised at the agreed upon price of US $ 4466.70 FOB USA. On receipt of the import documents, the appellants filed a bill of entry with the Customs on 15 -9 -1992. These documents were checked and scrutinized by the Appraiser and the other Officers as also by S.I.B. Appraiser. At that point of time, a dispute as regards the valuation and correct classification of the goods arose. It was observed by the Assistant Commissioner, C.C.I, on the bill of entry that since the parts in question are manufactured by M/s. Allison U.S.A., value is much lower than the actual value, forwarded the case to S.I.B. for further investigation. Subsequently, appellants business premises were put to search but nothing incriminating was recovered. Though the appellants were summoned for recording of their statement, no statement was, in fact, recorded.

(2.) THEREAFTER , a show cause notice dated 11 -1 -1993 was issued to the appellants alleging that spares imported by the appellants were grossly misdeclared in value and the plates declared by them are actually clutch plates correctly classifiable under heading 8483.90 attracting higher rate of duty. Accordingly, notice proposed to enhance the assessable value of the goods and to recover the differential amount of duty and also to impose penalty. After due adjudication, the Commissioner of Customs vide his impugned Order rejected the transaction value and ordered for determination of value and assessment on the basis of the price list of the manufacturer after giving usual discounts and deductions being offered by these manufacturers to ordinary importers. He also classified the goods under C.T.H. 8483.90. The same were held liable to confiscation under Section 111(m) of the Customs Act, 1962. However, as the goods were released provisionally, a penalty of Rs. 5.50 lakhs was imposed under Section 112(a) of the Act. The said Order of the Commissioner is impugned before us.

(3.) SHRI S.K. Bagaria, learned Advocate appearing for the appellants argued that the entire basis of the impugned Order is wrong inasmuch as the price of the goods has been enhanced by the Commissioner by relying upon the price list of M/s. Allison Transmission and M/s. Twin Dis Inc., both divisions of M/s. General Motors, USA and manufacturers of similar parts whereas the goods imported by the appellants are not products of these two companies. Elaborating on his arguments, he submitted that there are various manufacturers of such replacement parts of Loaders in U.S.A. as well as in other countries. Each part has got its own design, specification and parameters. The same have to be identified so as to enable the supplier to know about the actual requirement.