ORDER
G.A. Brahma Deva, Member (J)
1. These are two appeals filed by the appellants involving a common issue. Hence they are clubbed together and are being disposed of by this common order.
2. The point to be considered in these cases is whether the Department was justified in enhancing the invoice value on the ground that the declared price was not the normal price in the course of international trade.
3. The appellants M/s. Parekh Dyechem Industries Pvt. Ltd. imported a consignment of 20 M.T. Polyvinyl Alcohol Polysizer-173 at unit price of US $ 1,575 PMT CIF, Bombay. The suppliers of the goods were M/s. Nagase & Co. Ltd. Japan and the goods were supplied as per invoice No. C-11375, dated 24-9-1982. Similarly the appellants M/s. Pidilite Industries Ltd. imported a consignment of Polyvinyl Alcohol Polysizer -173 from the same suppliers at unit price of US $ 1550 PMT CIF Bombay as per invoice No. C-11477, dated 8-10-1982. The Assistant Collector has rejected the invoice value and determined the value observing price of similar goods imported from the same suppliers was US $ 1,600 PMT. This view was upheld by the Collector (Appeals).
4. Shri Prashant Bhushan, learned Advocate appearing for the appellants submitted that the quantity imported by other importers M/s. Raghunath Laboratories was only 3 M.T. and the price for small quantity cannot be compared with that of bulk quantity purchased by the appellants. The appellants had negotiated for the 100 M.T. of Polyvinyl Alcohol Powder at US $ 1575/- PMT CIF to be imported during October/December, 1982 and accordingly, they had opened letter of credit on 2-9-1982 for 20 M.T. and suppliers had agreed to send the goods for such negotiated price since both the appellants have opened the letter of credit and imported 20 M.T. on instalment amounting to 100 M.T. each by both the appellants. He said that difference in prices is only due to quantity ordered in bulk and the negotiated price due to bulk purchase cannot be considered to be special discount referring to the decisions of the Tribunal in the case of General Manager (Stores), Central Railways, Bombay v. Collector of Customs, Bombay 1983 (1) E.T.R. 441. He said that it is a common commercial practice to give preferential treatment in the matter of pricing to buyers who placed for bulk orders against buyers who purchased in small lots relying upon the decision in the case of National Rayon Corporation Ltd. v. Collector of Central Excise (Appeals) reported in 1984 (15) E.L.T. 201 (Tribunal). He contended that since transaction was at arm’s length and no extra commercial consideration has been passed the price at which the goods ordinarily sold is the value as envisaged under Section 14(1) of the Act and there was no justification for rejecting the invoice value. Apart from these contentions, he said that in the case of Pidilite Industries Ltd. since the price had fallen considerably the price was reduced by 25 Dollars and lower price was offered in tune with the commercial practice since the prices have gone down before shipment of the goods.
5. Shri B.K. Singh, learned SDR while countering the arguments submitted that Section 14(1)(a) refers to deemed value. Accordingly, the normal price ordinarily charged in the course of international trade is the price to be determined. It should be a price available to all importers. It is a special price offered to both the appellants and even according to them this reduced price is applicable only to them and this was confirmed by the indentors. Since special price offered to the appellants was not the normal price, the Department was right in comparing with the higher value of the same goods from the suppliers and accordingly, the value was determined. The case law cited by the other side in the case of National Rayon Corporation Ltd. (Supra) is not applicable with reference to excise law and similarly in the case of General Manager (Stores), Central Railway, Bombay (Supra), it was clearly observed therein that there is nothing on record also to indicate that similar goods have been imported by the other party in India at the relevant time. On the other hand, that the price of the contemporary imports of similar goods is available, the Customs Authorities are competent to determine the assessable value by adopting such price disregarding invoice price relying upon the decisions in the case of African Trading Co. Pvt. Ltd. v. Collector of Customs – 1993 (64) E.L.T. 497 (Tribunal) and Sound-N-Images v. Collector of Customs – 1993 (67) E.L.T. 512 (Tribunal), in support of his contention. He said that it is not clear whether the contract was for 100 M T. further no evidence has been adduced to show how the contract was amended to cover the reduction in the case of Pidilite Industries Ltd. and reducing the value with reference to invoice, dated 24-9-1982.
6. We have considered the submissions. We find that the date of import in both the cases is prior to the introduction of new Valuation Rules with reference to Section 14(1)(a) of the Customs Act. Transaction cannot be doubted in these cases since letter of credit was duly opened by the appellants and each of them imported 100 M.T. as can be seen from the evidence placed on record. We also take note of the fact that on 23-8-1982, the supplier has sent a telex to their indentors wherein they have accepted offer for 100 M.T. and the same price is not available to smaller quantity. The contents of the telex are as under :-
“ZCZC
BOMAC
TYCIADN
TO ASSO FROM CID-1 23-8-1982
(1) POLYSIZER 173 FOR PDI:
DSCSSD SHP BASG YR INFRTN ON NICHIGO ACTVTY.
FINALLY GOT OFFR D1575 CIFC3 FOR 100 M.T. BUSS SEP-DEC.
ABV PRC CNAPILCBL FOR SMALLER BUSS.
PLS FIX ODR WITH MNTHLY QTTY AND L/C OPENERS NAME
THIS IS BEST AWATG ODR SHEET.”
7. There cannot be any two opinions on the legal position as explained by the Departmental Representative that Section 14(1)(a) refers to deemed value and the normal price ordinarily charged in the course of international trade is the price to be determined. But in the instant case the evidence is not forthcoming that the price offered to the party was not the normal price but normal price was different from that in the course of international trade. An inference can be drawn that the price offered to the appellants is not the normal price since other importers imported similar goods at higher price according to the Department, but that itself cannot be taken as basis since the larger quantity imported by the appellants against the smaller quantity imported by other importers. The above telex clearly indicates that price offered for 100 M.T. is not applicable to smaller quantity. There is no evidence to show that similar quantity or substantial quantity was imported by other importers at higher price and in the circumstances, an isolated import imported by other importer, that too small quantity 3 M.T. as against 100 M.T. cannot be considered to be a comparable goods. In the absence of contemporaneous evidence and since the goods are not compared with that of comparable goods in all respects at the relevant point of time and taking into consideration that difference in price is about 50 Dollars in between larger quantity and smaller quantity imported by other importers, we do not find any justification to reject transaction value.
In the view we have taken, these two appeals are allowed with consequential relief.