ORDER
1. This Revenue appeal challenges the Order-in-Appeal No. 90/98(Cus.) dt 24.11.98 upholding the transaction value in terms of the contract, Bill of Entry, invoices filed by the importer with regard to import of machineries. The Ld. Commissioner has noted that the assessee’s contentions are supported in view of Apex Court judgment rendered in MIRAH EXPORT(P) LTD reported in 1998 (98) ELT 3. He has also noted that Revenue has not brought before him any evidence to show that there was import of identical gods; that higher price from same country of origin. he has noted that there was no allegation of undervaluation or that party had passed on the higher amount through any source. He held that in terms of section 14 of the Customs Act, the transaction value is required to be upheld. The findings given in para-4 to 9 are reproduced herein below:-
4. I have gone through carefully the facts of the case and the submissions made by the appellant. The issue to be decided in this appeal is as to what is the transaction value under Section 14 of the Customs Act, 1962 in respect of the above textile machinery imported by the appellant? The appellant is relying upon the invoice issued by the supplier of the machinery wherein the supplier has offered the discount of 57.65% based on negotiations. The lower authority has held that the said discount offered is abnormal and the nature of the discount and the reason for allowing such a huge discount have not been given. The lower authority has therefore, come to a conclusion that the discount of 57.65% allowed is abnormal discount and no manufacturer will allow such a huge discount of morethan 50% of the original value and that the price offered to the importer by the supplier was for promoting the sales in the country. The above observations of the lower authority are not supported by any documentary evidence that the price offered was for promoting sales of said goods and that the discount offered was un-reasonable and abnormal not given in the normal course of international trade. The supplier M/s. TRUTZSCHLER in their letter dated 21.9.98 have given the following explanations for offering the said discount:-
“Due to the changing conditions in the international market, we offer discounts to our customers according to the terms and business we conclude with our customers, and in case of M/s. S.P. Spinning Mills Ltd., we had finally concluded to supply the machinery, as mentioned in our above order acceptance for final CIF price of DM 910,000.00. The discount allowed to M/s. S.P. Spinning Mills Ltd., is not a special discount and we normally allow discounts to other customers also.
It may please be noted that the price of DM 910,000.00 CIF Tuticorin is the correct commercial value for the above machinery. Based on this, mills have established totally three LCs in our favour for the Net value of DM 910,000.00.”
From the above it is clear beyond doubt that the discount offered was as a result of negotiations and the same was not a special discount but it is allowed to other customers also. During the course of personal hearing the appellant produced the copies of the letters written by them to the authorised agent of the exporter i.e., M/s. Trutzschler that they had been negotiating for the import of the said machinery and they finally agreed for the price of DM 1,44,220 for DK 803 Carding machine and in their support they produced a copy of letter dated 7.3.97 of M/s. ATE Enterprises Ltd., the agent of the said exporter. From the above correspondence it is clear beyond doubt that the price offered was a negotiated price and was not a special price offered for promoting the sales of the said textile machinery as has been held by the lower authority in its order. In this connection I rely on the Hon’ble Supreme Court judgment in the case of Basant Industries [1996 (81) ELT 195] wherein it has been held that lower price obtained after considerable negotiations is acceptable.
5. The lower authority has also held in its order that it is not known whether the discount allowed to the importer is applicable to the other customers. It has not been mentioned in the impugned order as to whether there was any contemporary import of the above textile machinery at a price higher than that declared by the appellant. No specific reasons were also given as the why the invoice price of the manufacturer/supplier was not acceptable. On the other hand the appellant has submitted copies of the order confirmation in respect of the same textile machinery i.e., DK 803 carding machinery imported by M/s. Mafatlal Burlington, Bombay and M/s. Gontermann Pipers India Ltd., Chandigarh. In the commercial invoices issued by the same exporter i.e., M/s. Trutzschler for supply of DK-903 carding machines, the following price was charged:-
Name of the Commercial Order Price of No. Total
customer Invoice No. in carding of price
confir- machine(DM) carding (DM)
mation machine
No.
Mafatlal 1435-00-52058 47701 1,42,500 12 1710000
Burlington dt. 31.7.96
Bombay.
Gontermann 1379.00/47073 00303 1,40,000 4 560000
Pipers India dt. 29.5.98.
Ltd.,
Chandigarh
From the above it is evident that for the same carding machines i.e., DK 803 comparable price was available and the price per carding machine in the case of M/s. Mafatlal Burlington, Bombay was 1,42,500 DM and in the case of M/s. Gontermann Pipers India Ltd., Chandigarh the price charged was 1,40,000 DM. In the case of the appellant the price charged by the same exporter i.e., M/s. Trstzschler is 144220 DM after allowing a discount of 57.65%. Thus in the order of confirmation the exporter showed the price of 9,10,000 DEM as under:-
Price of 6 Nos. of
DK 803 @
1,44,220 DM – 8,65,320/-
Price of accessories
i.e., Emery Roll
waste collector and
Triple Taker in
system WEBFEED
WFD (3,17,250 –
2,96,375) – 20,875/-
Freight – 12,300/-
Insurance – 11,500/-
9,09,995
Rounded off DM 9,10,000/-.
It is therefore, clear that the invoice price of the exporter is a genuine price as the same exporter has charged a price of DM 142500 from M/s. Mafatlal Burlington and DM 140000 from M/s. Goudermann Pipers India Ltd., Chandigarh. The lower authority has not given any reason as to why the invoice price of the manufacturer/supplier could not be accepted. In the case of Commissioner of Customs Vs., Chemcrown India Ltd., [1998 (100) ELT 126] Hon’ble Tribunal has held that invoice cannot be routinely discarded except on the strength of a clear evidence that the invoice is not genuine and it is not showing the real price as has been transacted by the importer and the foreign supplier. Similarly the Tribunal in the case of SAI IMPEX [1992 (62) ELT 616] has held that manufacturer’s invoice, if available, and genuine is the best evidence of the price of the imported goods and the same view was confirmed by the Hon’ble Tribunal in the case of Inderjit Singh Bawa [1995 (78) ELT 122] and [1994 (73) ELT 573]. Similarly in the case of Overseas Trading Corporation Pvt., Ltd., [1998 (102) ELT 453], the Tribunal held that invoice price cannot be discarded when any manipulation or any extra commercial consideration is not shown. There is nothing on record to show that the invoice price was manipulated or any extra commercial consideration was involved. In view of this and relying on the above judgments, I hold that the value of the imported goods as declared by the appellant based on the invoice price has to be accepted for the purpose of levy of Customs duty as there is no evidence on record to prove that the invoice price of the manufacturer/supplier was not genuine.
6. The lower authority in its above order has held that the discount of 57.65% was abnormal and un-reasonable and no manufacturer would allow such a huge discount of morethan 50% of the original value. As already explained the discount offered was as result of considerable negotiations and this has been very well explained by the exporter in their letter 21.9.98 referred to above. No specific reasons have been given as to why only 20% of the discount was allowed. In the absence of any evidence that the invoice price was manipulated or there were some extra-commercial considerations, it was not proper on the part of the lower authority to reject the invoice price. Hon’ble Supreme Court in the case of Mirah Exports Pvt., Ltd., [1998 (98) ELT 3 (SC)] has held that due to international competition and aggressive sales policy a number of importers of bulk quantities are able to secure low negotiated prices which amounted to 50 to 70% of discount on the list prices and in the absence of any special relationship between exporter and importer, the invoice price has to be accepted. In para 14 of the said judgment and relying on the Basant Industries case [1006 (81) ELT 195 (SC)], the Hon’ble Supreme Court observed as under:-
“In that case the court on the basis of the correspondence that had ensued between the supplier and the importer, found that there was some bargaining before the price was finalised and that the price mentioned in the invoice that was agreed was in view of the quantity that was being imported by the importer. thus it is not un-usual for a foreign supplier to give a higher discount to an importer who is importing a much larger quantity and merely because such a discount has been given by the supplier, it cannot be stated that there has been any under valuation in the invoice.”
Relying on the above judgment of the Hon’ble Supreme Court I hold that as the price was a negotiated price and as M/s. Mafatlal Burlington, Bombay and M/s. Goutermann Pipers India ltd., Chandigarh had imported the said DK 803 carding machines at the rate of 142500 DM and 140000 DM respectively, the price of 144220 DM per carding machine charged by the supplier in the invoice is a genuine and correct price and the same has to be accepted in view of the above judgment of the Hon’ble Supreme Court.
7. The lower authority has also relied upon the order of the Hon’ble Tribunal reported in the case of Padia Sales Corporation [1992 (62) ELT 760] which was upheld by the Hon’ble Supreme Court in their judgment reported in [1993 (66) ELT 35(SC)]. However the Hon’ble Supreme Court observed in the case of Mirah Exports Pvt., Ltd., [1998 (98) ELT 3(SC)] that the said judgments have no application. In para 16 of the above judgment, the Hon’ble Supreme Court observed as under:-
“16. … The decision in Sharp Business Machines(Supra) has, therefore, no application to the facts of this case. Similarly the decision in Padia Sales Corporation (Supra) and Commerce International (Supra) and Commerce International (Supra) which are decided on their own facts have no application to the present case.
17. In the result the appeals are allowed and the impugned order of the Tribunal is set aside and it is held that the invoice prices mentioned in the invoices for the imports of ball bearings by the appellants shall be treated as the value for the purpose of the assessment of the Customs duty under Section 14 of the Customs Act, 1962.”
8. The reliance placed by the lower authority on the above judgment in the case Padia Sales Corporation is therefore, no correct. Similarly the decision of the Tribunal reported in [1991 (41) ELT 94] is also not relevant to the facts of this case as the price offered by the supplier was not for promoting the sales.
9. In view of the above, allow the appeal and set aside the order passed by the lower authority.
2. We have heard Ld. DR V. Ramakrishnan who points out to the facts of the case and the grounds taken up by the Revenue. It is his contention that the Commissioner ought to have remanded the case of the original authority tore-examine the issue and nt straightaway accepted their evidence which was placed before the Commissioner (Appeals). The sai evidence of contemporaneous evidence at the price declared by them was not before the original authority. It is his further contention that although the Apex Court has upheld the transaction value in terms of Section 14 and also for grant of bulk discount, but yet the judgment of PADIA SALES CORPORATION-1992 (62) ELT 760 by the Tribunal helps the revenue’s case. he seeks for setting aside the order and remand of the case in terms of prayer made in the appeal memo.
3. In counter, the Ld. Chartered Accountant Shri Viswanathan points out that there is no allegation of suppression of facts or undervaluation or mutuality of interest. He submits that revenue also did not produce any evidence of contemporaneous import, while the respondent importer had produced enormous evidence of contemporaneous imports wherein similar values have been accepted by the Revenue. The same has not been challenged. When the Commissioner (Appeals) has scrutinized the evidence and accepted their plea, Revenue cannot ask for de novo proceedings merely because the original authority had no occasion to examine the evidence. he submits that in order to reject the transaction value, the burden is on the Revenue to show that the value declared is not acceptable due to contemporaneous imports of same machinery at higher price by importers at same time, place and origin of country. Revenue has not placed any evidence even before the Tribunal to seek of the case remain d. The seeks for confirmation of the order as the Commissioner has examined the issue in detail as already extracted above and the citations which are applicable to the facts of the case. he relies on the Calcutta High Court judgment in the case of SNEHA TRADERS PVT. LTD. – 1992 (60) ELT 43 wherein the High Court of Calcutta had held that assessable value shall be the basis of transaction in which the seller and buyer having interest in the business of each other and the price is sole consideration. he has reiterated the arguments raised by them before the Commissioner (Appeals) and the judgment noted by the Commissioner (Appeals) seeking for dismissal of the appeal.
4. On a careful consideration of the submissions and on perusal of the Commissioner (Appeals) order, which is extracted above, we are of the consideration opinion that the Commissioner (Appeals) has scrutinized the evidence produced by the importer and has clearly noted that the Revenue did not produce any evidence of contemporaneous nature showing undervaluation and that the value is required to be revised. The burden of proving undervaluation is on the Revenue. In the absence of any such evidence, the transaction value in terms of Section 14 cannot be rejected as held by the Commissioner (Appeals) in the light of various judgments noted by him. Before us, the short prayer made by Revenue is that the contemporaneous evidence produced by the importer justifying the price to be same with that of other importers was required to be verified and matter remanded for de novo consideration to the original authority. We note that the Commissioner (Appeals) has got powers to admit additional evidence and to consider the matter afresh. He has clearly examined the evidence and has found that there was no evidence produced by the Revenue to counter either the transaction value or the evidence of contemporaneous import produced from other importers. In the absence of Revenue not having produced any rebuttal evidence or any charge of mutuality of interest, or with regard to any flow back, the transaction value as declared under Section 14 cannot be rejected and the judgment cited by the Ld. Chartered Accountant before the Commissioner has been examined and he has clearly noted that the judgment of MIRAH EXPORTS PVT. LTD. and that of BASANT INDUSTRIES (supra) clearly apply to the factors of this case. We also notice from the judgment of the Calcutta High Court rendered in the case of SNEHA TRADERS PRIVATE LTD. Vs. CC (supra) that assessable value shall be the basis of transaction in which the seller and buyer have not interest in the business of each other and the price is the sole consideration under Section 14 of the Act read with Rule 3 & 4 of Customs Valuation (Determination of Price of Imported Goods) Rules, 1988. Revenue has not produced any evidence to show that the seller and buyer had interest in the business of each other and the price is not the sole consideration. In the absence of any evidence produced by the Revenue and in the absence of their discharging their burden, the Ld. Commissioner (Appeals) has, with due determination, correctly upheld the evidence produced by the importer and his order accepting the transaction value and the price declared under Section 14 of the Customs Act is legal and proper. There is no merit in this appeal and hence same is rejected.
(Pronounced & Dictated in open court)