ATCO INDUSTRIES LTD Vs. COLLECTOR OF CUSTOMS

JUDGEMENT

(1.) BRIEF facts of the case are as follows : -

(2.) LEARNED Advocate, Shri Kantawala for the appellants has urged that the adjudicating authority's finding regarding relationship between the buyer and the supplier is without any basis in the face of the supplier's letter dated 17 -12 -1990 addressed to the Collector of Customs Airport, Sahar in which it is clearly stated that the relationship between the two parties is purely of importers and suppliers and there is no agreement of distributorship/indentorship as is generally executed between a distributor/indentor and supplier styled as distributorship agreement. In the absence of any such agreement between the importer and the supplier, the letter goes on to say, there is no relationship between the two. This letter also clarifies that their earlier letter dated Sept. 28,1990 was given by them to M/s. ATCO Industries Ltd. (appellants herein) "for establishing their genuinity in trading in our products". A certificate titled 'Distributorship Certificate' dated Sept. 28,1990 certifies that the appellants herein is distributor of the supplier for sales promotion and technical service of Shimadzu Analytical Instruments in the territory of India. As such, the appellants are entitled to submit offer in place of the suppliers and are responsible for maintenance and technical service necessary for the suppliers offered equipment. The certificate was valid until Sept. 02,1991.

(3.) OPPOSING the contention of the learned Advocate, Shri Prabhat Kumar, learned JDR for the Revenue has stated that the Collector has rightly applied Rule 5 of the Valuation Rules in view of the clear distributorship certificate dated 28th Sept., 1990 produced by the appellants themselves. The prices declared by the appellants, therefore, are influenced by the relationship of principal -distributorship between the suppliers and the appellants respectively. The price list clearly indicates that 40% discount is only to the distributors and not to the ordinary importers. The price declared by the appellants is even less than level arrived at after excluding the element of discount, as observed by the adjudicating authority. It is, therefore, apparent that the prices have been greatly influenced in the present transaction by factors extraneous to sale of the goods. The price declared by the appellants, therefore, has been rightly discarded by the Collector. He has further submitted that price list of the manufacturers is a valid basis for determining the price of the imported goods, as held by the Tribunal in 1990 (48) ELT 421 [Wax and Wax Products].