ORDER
K.S. Venkataramani, Member (T)
1. C/Misc/161/89-A. – This Misc. application has been filed by the appellants as comments on the cross objection filed by he department in C/Cross/58/89-A. It is seen that this is merely parawise comments on he cross objection. Taking up the cross objection itself we find that this is merely in the lature of parawise comments on the appeal filed by M/s. Rajkumar Knitting Mills (P) Ltd. Therefore, we dismiss the misc. application and the cross objection is mis-conceived.
C/3660/88-A. – This appeal is directed against order dated 16-11-1988 passed by the Additional Collector of Customs, Bombay by which he had enhanced the value of the goods imported by the appellants to a higher amount than what was declared by them in the Bill of Entry filed for the clearances of the goods. The appellants imported 24 sets of second hand waterjet looms and filed Bill of Entry for the same. On examination it was found that the goods were old and used and no re-conditioning was carried out. The order of the year of manufacture was found to be 1982 and not 1981 as indicated in the Chartered Engineers’ Certificate filed by the appellants. The value declared for the looms was Japanese Yen 4 lakhs per set. It was noticed that the Japanese supplier M/s. Jinbo Boeki Shokai had supplied identical goods to M/s. Hibotex P. Ltd., Surat at the rate of Japanese Yen 7 lakhs per set vide their invoice dated 23-6-1988. The Hibotex consignment was shipped on 25-6-1988 whereas the goods of the appellants herein was shipped on 18-6-1988. In terms of Section 14(l)(a) of the Customs Act, the value of the goods shall be deemed to be the price at which such or like goods are ordinarily sold or offered for sale for delivery at the time and place of importation. Since the date of invoice and date of shipment and date of arrival of the goods imported by M/s. Hibotex P. Ltd. were contemporaneous as those of the appellants and since the goods were identical the proceedings were initiated against the appellants for enhancing the assessable value based on such other imports and the proceedings ultimately resulted in the order of the Additional Collector by which he found that the price for the purpose of assessment in the case of the appellants should be fixed at Japanese Yen 6 lakhs after giving a quantity discount of J. Yen 1 lakh from the price charged from the other importer M/s. Hibotex P. Ltd. The present appeal is against this order of the Additional Collector.
2. Shri D.N. Mehta, the learned Counsel appearing for the appellants contended that the appellants in this case have got the matter regarding the price clarified from the supplier who had issued a letter dated 7-9-1988 in which the supplier had clarified that the price charged to them has been correctly invoiced. He further pointed out that the Additional Collector had accepted the suppliers letter of 7-9-1988 for the purpose of giving a quantity discount but he had rejected it on other aspects which is bad in law. The department could not take support of the suppliers letter in parts, it has to be accepted hi toto. The import of M/s. Hibotex is the solitary instance based on which the department have sought to enhance the assessable value which is not valid under Section 14 of the Customs Act, 1962. He further pointed out that the new provisions regarding customs valuation based on transaction value will apply to their case because on the date of the issue of the Show Cause Notice the change in the law had been effected. He further pointed out that there cannot be any continuity of the proceedings under the old law, in view of Section 6 of the General Clauses Act and the new law, namely, transaction value in the new law will apply. The learned counsel also relied upon the case of M/s. Rakesh Press reported in 1985 ECR 646 on valuation of second hand machine and also Tara Art Printers case 1985 (20) E.L.T. 358 and decision in the case of Western Electronics reported in 1987 (29) ELT 818 where it is held that declared value cannot be compared with the earlier imports. He also cited the case of Super Fasteners v. CCE, Bombay reported in 1984 ECR 443 that reasonable basis is necessary for the department to prove undervaluation because the onus to prove such charge is on the department.
3. Shri V.K. Sharma, the learned S.D.R. appearing for the Collector adopts the reasoning given in the impugned order and pointed out that it was on examination of the goods that the discrepancy regarding the year of manufacture was found and further investigation showed that price at which M/s. Hibotex P. Ltd. had imported the goods was much higher and that too from the same supplier about the same time. The appellants claim that the value difference between the two was due to re-conditioning of the Hibotex machine is also not borne out as the Chartered Engineers’ certificate in the case of both are similarly worded. There is nothing to show that the machines imported M/s. Hibotex P. Ltd. were re-conditioned. He also drew attention to the comparison of the values of the three imports brought out in the adjudication order which clearly indicate a rising trend and the lower price declared by the appellants during the same period was clearly questionable. The letter of 7-9-1988 from the supplier obtained by the appellants was subsequent to the filing of the Bill of Entry and it is clear that it has been given by the supplier as desired by the appellants to satisfy their purpose and to suit their defence. The deduction of Japanese Yen 1 lakh allowed in the adjudicating order was not solely on the basis of the suppliers letter but was also a result of the examination of the machines. The new valuation Rules of transaction value will also not be applicable, according to the learned S.D.R. because the goods had been imported before the new section came into effect. The value has been fixed in this case under Section 14(l)(a) on the basis of the value of contemporaneous import and should be the correct value.
4. We have carefully considered the submissions made by the learned counsel and the learned S.D.R. The issue is whether the higher value of the goods, namely, Waterjet Looms determined by the Additional Collector is valid under Section 14(l)(a) of the Customs Act, 1962 or whether the value as declared by the appellants should be accepted. Section 14(l)(a) of the Customs Act runs as follows :-
“14. Valuation of goods for purposes of assessments – (1) for the purposes of the Customs Tariff Act, 1975 (51 of 1975), or any other law for the time being in force whereunder a duty of customs is chargeable on any goods by reference to their value, the value of such goods shall be deemed to be:-
(a) the price at which such or like goods are ordinarily sold, or offered for sale, for delivery at the time and place of importation or exportation, as the case may be, in the course of international trade, where the seller and the buyer have no interest in the business of each other and the price is the sole consideration for the sale or offer for sale:
[Provided that such price shall be calculated with reference to the rate of exchange as in force on the date on which a bill of entry is presented under Section 46, or a shipping bill or, bill of export, as the case may be, is presented under Section 50].
The goods imported in this case are second hand machines. When they were examined it was found that the year of manufacture was different from the one given in the Chartered Engineers’ Certificate and further the Custom House had the data regarding the import by Hibotex P. Ltd. of same machines (second hand) from the same importer which were at a higher price of Japanese Yen 7 lakhs whereas the appellants had declared the price Japanese Yen 4 lakhs. The Custom House chose to adopt the Hibotex price for determining the assessable value of the appellants’ consignment. The appellants, however, pointed out to another import of M/s. N.V. Textiles and K.V. Textiles which were also of the same machines (second hand) but at a lower value of Japanese Yen 5 lakhs than the value of Hibotex and they further claimed that because they had placed a large order for 80 sets they had been given quantity discount by the suppliers of Japanese Yen 1 lakh on the basis of which their price was comparable with the previous import. The question is, how far the criterion in Section 14(l)(a) is satisfied. This section refers to the time and place of importation and if on this basis we compare the time of import it is found that there is much more proximity between the date of shipment by the Hibotex P. Ltd. and that of the appellants and also equal proximity in the date of arrival of these two imports because the appellants’ goods were shipped on 18-6-1988 and Hibotex on 25-6-1988. The appellants’ goods arrived on 26-7-1988 and that of Hibotex P. Ltd. on 4-8-1988. The supplier of the machines from Japan is the same, the goods imported are in both cases second hand machines. That the machines imported by the two parties had not been reconditioned is clearly evident from the wording of the Chartered Engineer’s Certificate furnished to the Department in these two cases as also from the examination reports by customs on import. Therefore, they are such or like “goods” which have been imported at about the same time into India at the Bombay Port. In these circumstances it will be valid to hold that the two imports are contemporaneous for the purpose of determination of the assessable value. In such circumstances, the other two instances of import of the similar machines by M/s. N.V. Textiles and K.V. Textiles are not so closely comparable. Even, there also, the price charged at Japanese Yen 5 lakhs is higher than that declared by the appellants. In the analysis of the values of these imports we find that there is no effective answer to the pertinent point raised by the adjudicating authority that M/s. K.V. Textiles and N.V. Textiles entered into contract in 1987 for Japanese Yen 5 lakhs per set and Hibotex P. Ltd. Contract was in May 1988 at Japanese Yen 7 lakhs per set. The appellants entered into contract with the supplier between these months in December 1987 and while price for N.V. Textiles and K.V. Textiles is Japanese Yen 5 lakhs, the price for M/s. Hibotex P. Ltd. is 7 lakhs and the price for the appellants is only Japanese Yen 4 lakhs which is clearly against the price trend reflected in these contracts with the same supplier during the months Sept. 1987 to May 1988. The appellants herein have relied upon the letter of the supplier dated 7-9-1988. A perusal of this letter shows that it is in the nature of a declaration given under heading To whom it may concern” and it certifies certain facts according to the suppliers. It gives information not only of the imports of the appellants herein but also it goes on to say that the machines supplied by them to M/s. Hibotex P. Ltd. are re-conditioned. The question arises as to how in such a certificate which mainly seem to relate to the appellants import, the details of their supply to Hibotex had been brought in and also the aspect of reconditioning. On the other hand the Chartered Engineers’ Certificate for Hibotex which is quoted in the Additional Collector’s order, and the original certificate which was submitted by the appellants herein which is also quoted in the order-in-original clearly would indicate that the two certificates are similarly worded and their meaning and purport is no different from one another. The certificate in the case of appellants is “These machines do not require any repairing and are in satisfactory working condition and the expected residual life is at least 8 years.” The certificate in the case of Hibotex was “These machines do not require reconditioning or repairing and are in very good working condition and the expected residual life is about 8 years”. Therefore, the contents of the certificate from the supplier produced subsequent to the initiation of proceedings against the appellants has rightly been not accepted on this aspect. Thus the value of similar second hand machines imported from the same Japanese supplier about the same time at the Bombay Port have been found to be higher on the basis of contemporaneous imports of Hibotex P. Ltd., the adoption of the higher value is correct. The acceptance of the amount of discount as given in the supplier’s letter of 7-9-1988 by the adjudicating authority is more in the nature of a collateral evidence and hence would not mean that for that reason that letter should be accepted as a whole.
5. The appellants have relied upon the CEGAT decisions in Rakesh Press -1985 (21) ELT 140, Tara Art Printers : 1985 (20) ELT 358 and Super Fasteners v. CC, Bombay – 1984 ECR 443. We have perused these decisions and find that appellants’ case is on facts distinguishable. In the case of Rakesh Press the price of the second hand machines imported from Sweden was sought to be compared by the department with price of such machines imported from England; there was also difference in the residual life certified for the two machines and the time interval between the imports was six months. However, in the present case of the appellants the Deptt. had taken for comparison same machines imported from the same supplier and the time of import is very near to each other so as to be considered contemporaneous imports. In the Tara Art Printers case the deptt. had compared the price of imported second hand machines manufactured in 1974 with that manufactured in 1975 which is not the case in the present appeal. The same distinction of facts relating to different age of the machines compared for valuation existed in Super Fasteners’ case also.
6. On the other hand we find this Tribunal had observed in the case of Consolidated Coffee Ltd. v. CC, Bombay -1986 (24) ELT 429:
“5 (c) the deemed value of imported goods, where duty is to be levied ad valorem is, in terms of S.14 of the Act, not their actual value, the invoice value or the price at which they are capable of being sold. It is, on the contrary, the price at which such goods are ordinarily sold or offered for sale at the time and place of importation, i.e., the market price at the time and place of importation [Cl.(a) of Section 14 of the Act] and where it is not so ascertainable, its nearest equivalent determined in accordance with the Customs Valuation Rules, 1963 [Cl.(b) of Section 14 of the Act]. This was so even in terms of Section 30 of the Sea Customs Act [1978 E.L.T. 260 – Vacuum Oil Company v. Secretary of State – wherein it was laid down that it was the “price current for staple articles, the amount of which, if not a subject of daily publication in the press, is easily ascertainable in appropriate circles”] and no conceptual change and apparently resulted in the provisions as whole, notwithstanding, perhaps, the intent of doing away with it to bring the provisions more in accord with those of CATT. The price at which goods are ordinarily sold at the time and place of import cannot be anything other than the market price ruling on or about the date of import at the place of import;
(e) the expression “in the course of international trade” merely means and signifies the movement of goods from abroad into India and has also a reference to a period of time during which the movement is in progress pursuant to or connected with trade and commerce with other countries, following the ratio of the Hon’ble Supreme Court in AIR 1953 S.C. 333 (State of Travancore v. 5. V.S. Factory) while construing “in the course of import of goods into or export of the goods out of India”. The expression “in the course of international trade” does not, in any case, signify the invoice price in the case of the import in question”.
(f) this is not to say that the invoice price becomes, altogether irrelevant. It furnishes the basis in terms of Rules 4(a), 5, 6 and 8 of the Customs Valuation Rules, 1963.”
Clearly in the present case the Deptt. had the evidence of value from contemporaneous import of such or like goods namely second hand machinery from the same supplier and imported at the same port and we hold that the value so determined is value for assessment under Section 14(l)(a) of the Customs Act, 1962. The further argument advanced that since on the date of Show Cause Notice valuation based on transaction value as per the amended provisions of Section 14 have come into force and that it is that valuation that will cover the import is not tenable because of the very wording of the Section 14(l)(a) which refers to the value of the goods should be deemed to be the value at the time and place of import which the appellants have duly declared in their Bill of Entry filed by them. This was admittedly prior to the date of which the amended Section 14 came into effect. Therefore, in this view of the matter we find no reason to interfere with the order passed by the Additional Collector and the appeal is rejected.