SHREE GANESH AGENCIES Vs. CC

JUDGEMENT

(1.) The appellants had imported a consignment of Methyl Ethyl Ketone (MEK, for short) which was declared to be inferior quality. The value declared was US 510/MT CIF. These declarations in the relevant Bill of Entry were not accepted. The department particularly doubted the veracity of the importer's description of the goods (inferior quality) and accordingly a sample of the goods was drawn and sent to the Department's Chemical Laboratory. The relevant test memo queried, inter alia, as to whether the sample was MEK of inferior quality. The report was as follows: "Sample is in the form of colourless liquid. It is an organic chemical (Methyl Ethyl Ketone). Remnant returned" Not satisfied with the above report, the Customs authorities requested the Dy. Chief Chemist to offer his opinion as to whether the goods was of inferior quality. The response of the Dy Chief Chemist was as follows : "The analytical constants obtained here are in agreement with those mentioned in the books available for technical grade of Methyl Ethyl Ketone, wherein there is no minimum purity has been prescribed. If the party contends that the product is inferior quality they may be asked to produce authentic certificate of analytical constants, purity and other documentary evidences for such claim" The authorities managed to obtain a telex message which was purportedly sent by the manufacturer of the subject goods. (a French Company) to their agent in India. This message suggested price of the goods as US 1275/MT CIF. The adjudicating authority accepted this price and directed assessment of the goods on this basis. Aggrieved by this, the party preferred appeal to this Tribunal. The Tribunal remanded the case to the Collector who revised the unit price as US 1090 CIF on the basis of market price. The Collector's decision was taken in appeal by the party. The Tribunal, once again, remanded the case to the adjudicating authority directing it to re -adjudicate the dispute after hearing the party in connection with market enquiries. The Commissioner of Customs, thereupon, passed Order -in -Original dated 28.7.98 accepting the unit price of US 1275 CIF as the basis of assessment, imposing a redemption fine of Rs 25,000/ - in lieu of confiscation of the goods and, further, imposing a personal penalty of Rs 2,500/ - on the importer. The present appeal is against this decision of the Commissioner.

(2.) AFTER examining the records and hearing both sides, we note that the two sides have relied upon one or the other observation recorded in the Tribunal's second remand order. If this conflict is taken ahead, we will have no option but to make a third order of remand. But we are not inclined to embark on such an exercise, having regard to the need of giving a quietus to the dispute at this distant point of time. Hence we proceed to deal with the dispute.

(3.) THE department's evidence is the telex message which has been acknowledged by them as a "quotation". It is settled law that a mere quotation is not any basis for determining the value of the goods under the Customs Valuation Rules read with Section 14(1) of the Customs Act, 1962. Hence we reject the evidence of telex message. What remain are the test report and the Dy. CC's opinion. We have already extracted these in this order. We have not found, in any of these materials, any categorical answer to the Department's query as to whether the imported chemical is of inferior quality. The test report says that the chemical is Methyl Ethyl Ketone. The Dy CC's opinion says that it is Methyl Ethyl Ketone of technical grade and further that there is no minimum purity prescribed for technical grade Methyl Ethyl Ketone in the technical literature examined by him. By no stretch of imagination can this opinion be taken to mean that the subject goods was not of inferior quality. The department has failed to discharge their burden of showing that the chemical imported by the appellants was not of inferior quality. The Revenue has never had a case that the declared price was low even for MEK of inferior quality.