ORDER
U.L. Bhat, J. (President)
1. Respondent is absent but sent a request for disposal of the appeal on merits. We have heard Shri M. Ali, JDR and perused the papers.
2. On the import of Tolune-Di-Isocynate 8/20 T.D.I., 20,444 kgs. gross (19 MT) Net in 76 Drums. Respondent presented Bill of Entry and import documents declaring value at the rate of US $ 2,000 PMT. The price was shown US $ 2,000 PMT was inclusive of US $ 32 PMT as interest for 90 days. Assistant Collector held that the amount shown towards interest was to be added to the assessable value. In appeal, Collector (Appeals) held to the contrary. The Collector of Customs being aggrieved has filed this appeal.
3. Indent was submitted on 2-4-1992. The indent indicated the term of payment as follows :-
“On the 90th day from the date of Bill of Lading against a confirmed irrevocable and without recourse L.C. to be established in favour of supplier.”
The invoice dated 13-5-1992 specifically referred to the irrevocable and confirmed letter of credit for 90 days and indicated the due date as 30-8-1992. There can be no doubt in the circumstances that payment was in fact made on the expiry of 90 days of the date of shipment. Therefore, it was not a manipulation on the part of the importer or supplier to show the price and the interest in separate invoices.
4. Appraising Manual at page 134 refers to the following instructions dated 27-7-1957 of Ministry of Finance :-
“The Government of India has decided that the interest charged by the suppliers in the case of goods imported under the deferred payment scheme should be excluded from the calculation of real value provided such interest charges are shown separately in the invoices.”
The following decision of the Customs Valuation and Test of the Technical Committee on Customs Valuation may also be referred to :-
“The Parties to the Agreement on Implementation of Article VII of the GATT agree as follows:
Charges for interest under a financing arrangement entered into by the buyer and relating to the purchase of imported goods shall not be regarded as part of the Customs value provided that;
(a) the charges are distinguished from the price actually paid or payable for the goods;
(b) the financing arrangement was made in writing;
(c) where required, the buyer can demonstrate that –
such goods are actually sold at the price declared as the price actually paid or payable and –
the claimed rate of interest does not exceed the level for such transactions prevailing in the country where and at the time when the finance was provided.
This Decision shall apply regardless of whether the finance is provided by the seller, a bank or another natural or legal person. It shall also apply, if appropriate, where goods are valued under a method other than the transaction value.”
The conditions stipulated in Clause (a) and (b) are satisfied in the instant case. Condition in Clause (c) was not invoked as the importer was not required to demonstrate as indicated regarding the price and rate of interest.
5. In the above circumstances, it is clear that the principle accepted by the Ministry of Finance, Government of India, has also been accepted by the GATT Committee of Customs Valuation. Going by these principles, the amount of US $ 32 PMT was rightly held to be not included in the assessable value. We find no ground to interfere and dismiss the appeal.