ORDER
I.J. Rao, Member (T)
1. The question that arises for a decision in this appeal relates to the value of transistors imported by the appellants under a bill of entry covering two invoices dated 5-4-1990 and 18-4-1990. The goods comprised
Avantek Silicon transistors 2000 nos. and Avantek transistors FLT (model ATF 10135). The appellants declared a value of Rs. 1,06,160/-. The Customs after due process enhanced the value to Rs. 2,13,841.78 by the impugned order, and demanding duty on the enhanced value, confiscated the goods and imposed a penalty also. Hence this appeal.
2. Shri Puri, the learned Advocate for the appellants submitted that the two transistors were components for dish antenna manufactured by the appellants. He stated that these two were critical components and were manufactured by only two Units in the world, one in Japan and the other in United States of America. The present import was from the United States. The learned Advocate submitted that the United States controls the export of the transistors through a body called COCOM.
3. Shri Puri argued that enhancement of the value, confiscation and penalty were ordered by the Department on the basis of an import made in October, 1988 by another importer for 200 pieces of only one type of transistors. The second piece of evidence relied on by the Customs consisted of two quotations obtained from Singapore and Hongkong. Submitting that these two bits of evidence were not sufficient to justify the impugned order, the learned Advocate argued that the import made by A.K. Electronics was in November 1988 whereas the subject importation was in April/May 1990. Therefore, there was no nexus in time. He further submitted that the earlier importation relied on by the Customs was only for 200 pieces whereas the appellants imported a total of 6000 pieces. The learned Advocate sought to discredit the quotations obtained by the Customs submitting that the items could not have been sold by Hongkong and Singapore in view of the control by COCOM. He referred to the reply to the show cause notice submitted by the appellants wherein inter alia it was stated that the quotations were not reliable as the enquiries were engineered. Shri Puri emphasised that this allegation was not dealt with by the adjudicating officer. Referring to the quotations the learned Advocate further submitted that they are in any event not reliable documents because they are not even legible and it is not at all clear as to who sent the quotations. The learned Advocate finally submitted that the present shipment was only a part-consignment out of a total 1 lakh transistors of 3 types. He also relied on the ratio of the two judgments of this Tribunal:
(i) Babcock Venkaleshwara Hatcheries P. Ltd. v. Collector of Customs, Bombay -1985 (20) ELT 335 (Tribunal)
(ii) Weston Electroniks Ltd. v. Collector of Customs, Bombay-1987 (29) ELT 318 (Tribunal).
4. Shri Ganu, the learned SDR justifying the impugned order submitted that reliance on quotations was correctly placed and referred to the fact that in the earlier stages the appellants themselves imported identical goods at $14. He also pointed out that the price paid by A.K. Electronics was the same as the price paid earlier by the appellants and indicated in the quotations obtained by DRI. Submitting that the quotations represented the current price of the goods the learned representative argued that the invoice prices did not represent the price ordinarily charged in the course of international trade. He further submitted that the appellants not having filed any evidence of quantity discount they are not entitled to argue that the reduction in price was due to buying in high quantity, and Shri Ganu argued that taking together the pieces of evidence relied by the Customs collectively indicate that there is under-valuation.
5. We have considered the submissions of both sides. The appellants have filed before the adjudicating officer and before us the invoices, the bill of entry and the telex correspondence between them and the suppliers and also between them and the local agents, M/s. Hinditron Services Pvt. Ltd. The Customs in turn relied on two pieces of evidence, one is earlier import of M/s. A.K. Electronics where the goods were imported at $ 8.50 to 8.65 and $ 1.55 for models of ATF 10135 and AT-41486 TRI respectively.
6. In so far as the import by M/s. A.K. Electronics is concerned we observe that as submitted by Shri Puri, the learned Advocate, there is no nexus in time between that importation and the present importation. Besides, as pertinently submitted by the learned Advocate that order was for 200 transistors. We do keep in mind that the appellants did not show that there is any quantity discount offered by the manufacturer. At the same time we cannot lose sight of the fact that the present importation is a much bigger one and that the appellants have placed
before us copies of correspondence.
7. We perused the two quotations, photostat copies of which were placed before us by the appellants. One of these quotations is completely illegible and even the learned SDR could not place before us a readable copy. The second quotation does not clearly show as to who received it. Keeping in mind the undisputed submission that the present importation is of a monopoly item and that the sales of the item appear to be controlled, we cannot place reliance on this quotation without knowing as to who offered to supply the goods and to whom., Further, normally, a quotation is not a reliable guide to value as it can be manipulated. We further keep in mind the submissions made by the appellants before the learned Additional Collector. In their reply to show cause notice in paragraph 9 (c) the appellants submitted as follows :
“In reply to para 6 of the show cause notice, the so-called enquiries, if at all made by the SIB are not admissible as evidence on legal basis. Factually also these enquiries are engineered; specially so because Microwave Transistors and BIPOLLARS as per numbers mentioned, are items controlled by COCOM REGULATION and they cannot be exported to India without an export licence of the Government in the country of manufacture. The prices quoted in the said quotations alleged as the prevalent market prices, have been obtained from ALTOS who is neither a manufacturer of these items nor a dealer in the components under imports. M/s. ALTOS are only manufacturers of computers and the quotation has been obtained on the instigation of somebody and is factually incorrect. The second quotation alleged to have been obtained from Singapore has neither head nor tail. It is not also stressed that these components cannot be supplied by anybody in Hongkong or Singapore as they are only available from Japan or USA who are the countries for manufacture of these items. Even otherwise, legally, any quotation obtained from a country other than the country of import by SHYAM is not admissible under the Customs law for best judgment assessment.”
This submission was not disposed of by the learned Additional Collector.
8. In view of this we cannot place any reliance on the quotations. Therefore, we have to hold that the impugned order was passed without being based on acceptable evidence.
9. We also take note of the two judgments cited by the learned Advocate to plead that mis-declaration of value should be conclusively proved by the Customs. The ratio of these two judgments applies to the facts of this matter. There is no evidence in the hands of the Customs to show that there was any illegal remittance of foreign exchange. We are aware that proving such remittances is not easy. We also note the submission that it is a monopoly item. But we cannot ignore the pleas made by the appellants and there is no material before us to justify a finding that the price at which the appellants imported the goods is not a fairly negotiated price. There is nothing to indicate that others could not have imported the goods at the said prices, all other circumstances being equal.
10. For these reasons we hold that there is no evidence to justify the impugned order. We, therefore, set it aside and direct that consequential relief be given to the appellants.
