ORDER
U.L. Bhat, J. (President)
1. This appeal is directed against the order dated 19-3-1997 passed by the Commissioner of Customs, Kandla, confiscating two consignments of Copper Cathodes covered by Bills of Entry No. 6569 and 6571 both dated 25-7-1996, allowing redemption on payment of fine of Rs. 10 lakhs, confiscating seven consignments and since thatconsignments had been released imposing penalty of Rs. 30 lakhs as alternative imposing penalty of Rs. 5 lakhs and determining the value of the goods at US $ 2245.00 per metric tonne CIF for the purpose of assessment under Rule 6 of the Customs (Valuation) Rules, 1988.
2. Appellant, a trader in India imported Copper Cathodes of CIS origin from a supplier in Canada who shipped the goods from Dubai. Nine Bills of Entry (three dated 8-7-1996 and three dated 25-7-1996) were presented along with copies of contracts dated 26-6-1996 for 60 metric tonnes and 240 metric tonnes respectively and invoices. On account of suspicion about the correctness of the value declared, investigation was resorted to at the end of which show cause notice was issued alleging that the two contracts were fabricated and manipulated and that the correct price was US $ 2245.00 per metric tonne and alleging misdeclaration of value with intent to evade duty. Though the appellant rebutted the notice, the Commissioner confirmed the proposals in the show cause notice.
3. The two contracts bear the date 26-6-1996. The Bills of Entry bear the dates 8-7-1996, 25-7-1996,15-7-1996 and 28-8-1996. The appellant is not able to connect the particular Bill of Entry with the particular contract. Since the contracts are for 240 metric tonnes and 60 metric tonnes and the total quantity covered by the nine Bills of Entry is less than 200 metric tonnes, we take it that the consignments relate to the contract for supply of 240 metric tonnes. The Custom House enquired from the linear agent of the containers seeking certain particulars about the containers. The linear agent informed the Custom House that in regard to three Bills of Lading, the date of booking was 6-10-1996, the date of release of containers was 12-6-1996, the date on which container was received back after stuffing was 19-6-1996, the date of loading was 28-6-1996. The corresponding dates in respect of three other Bills of Lading were 26-6-1996, 25-6-1996 and 28-6-1996. The linear agent also stated that the entire process would take about 10/20 days. The Custom House sought the opinion of two foreign linear agents in Dubai operating from Dubai to Kandla and they stated that the stuffing of the container is done only after shipping bill and details regarding the port and name of the consignee, etc. are made available to them and containers are requisitioned by the agent after the freight has been agreed to between the loading port and destination and thereafter the containers are given to the shipper. If the stuffing is done inside the port, a copy of the shipping bill duly processed by the Customs is taken and sometimes empty containers are allotted to shipper or their agent for stuffing the cargo outside the shipper’s premises.
4. The above particulars make it clear that in respect of six consignments, supplier had booked the containers on 10-6-1996 or 20-6-1996 and stuffing was done during the period from 12-6-1996 to 19-6-1996 in the case of three containers and 25-6-1996 in the case of three other containers, though the confirmation of the order took place only on 26-6-1996. These circumstances are clearly telltale. To get over this difficulty, appellant placed reliance on two fax messages said to have been exchanged between the appellant and the supplier. These are seen at pages 25 and 26 of the paper book. At page 25 is a copy of the fax message dated 26-6-1996 of the importer to the supplier referring to their telephonic conversation previous week and requesting confirma-tion that the supplier can ship the required quantity of goods at short, notice once the contract is finalised. At page 26 is the alleged reply confirming immediate despatch on confirmation. In our opinion, these documents are not sufficient to get over the inferences which can be drawn from the data referred to above. It is difficult to believe that the consignments would have been made available and stuffed before confirmation of the order, that is, before knowing the actual quantity required to be despatched and the price at which the goods are to be sold. In these circumstances,the irresistible inference is that these documents were manipulated with the help of the supplier. The import documents are based on the contract or the confirmation of the order issued by the supplier. Since the contracts cannot be relied on, the transaction value reflected in the import documents has no sanctity at all and cannot be accepted. The question which remains for consideration is what exactly should be the correct assessable value.
5. The Commissioner relied on seven instances of comparable imports at US $ 2245.00 per metric tonne CIF for the purpose of determining the assessable value. The show cause notice and the impugned order indicate that despatch in all the seven cases was made by the same supplier. The appellant now contends, though no such contention was put forward before the Commissioner, that the supplier was connected only with one of the imports, namely, supply of goods of UAE origin. The quantity covered by the seven consignments ranged from 17.70 metric tonnes to 22.41 metric tonnes. The price was uniform, namely, US $ 2245.00 per metric tonne. Three imports were of Copper Cathodes of Canadian origin, two were of German origin and one each of UAE and CIS origin. The appellant emphasises that goods manufactured in a country different from the country in which the said goods were manufactured, cannot be regarded as comparable. The appellant also adverted to the quantity covered by each import in comparison with the total quantity contracted for and imported by the appellant. The contracts covered 300 metric tonnes and the nine Bills of Entry covered about 177 metric tonnes. The seven compared imports were during the period from 25-6-1996 to 1-7-1996. At page 24 of the paper book is a statement showing the London Metal Exchange Prices for Copper Grade A. The statement gives the prices during the period from 11-6-1996 to 10-7-1996 during which period the price came down from US $ 2520.00 per metric tonne to US $ 1985.00 per metric tonne. There was a steady decline of the prices during the whole period except a few days when the prices marginally recovered. According to the appellant, the price for the seven compared imports has no significance unless the dates and the respective quantities covered by the respective contracts are available for consideration. It is also contended that the Commissioner should have taken into consideration the circumstance that quantity discount is ordinarily available in international trade. The answer of Shri M. Ali, JDR is that the appellant has not adduced any evidence to show that any specific discount was allowed on account of quantity. If anyone is in a position to establish that specific discount was available for specific that would certain be helpful. Even though the import documents do not refer to the aspect of discount, wide variation in the quantity imported and the quantity covered by compared transactions cannot be ignored and has to be taken into consideration in the matter of comparison ofprices and determination of correct value. Determination of the country of origin also is a significant aspect. Some more effect should have been put in to find out more details regarding the seven compared imports. Without such details, it would not be correct to state that since the compared import from CIS and the imports from other countries were at the same price, namely, US $ 2245.00 per metric tonne CIF, this price should be accepted as correct in the case of the said imports.
6. In view of the circumstances indicated above, we are not satisfied that the Commissioner has arrived at the correct assessable value. Correct assessable value has to be determined on consideration of the various circumstances referred to above and after ascertaining the relevant facts indicated above.
7. For the reasons indicated above, we set aside the impugned order and remand the case to the jurisdictional adjudicating authority for decision afresh in accordance with the law and the observations contained in this order. If any more details are collected by the authority, the same will be made available to the appellant before personal hearing. The appeal is allowed.