ORDER
K.S. Venkataramani, Member (T)
1. This is an appeal directed against the order dated 22-3-1989 passed by the Additional Collector of Customs, Madras by which he had ordered confiscation of 54.67 M.T. of Copper Dross under Section 111(m) of the Customs Act, 1962 giving the option to redeem the same on a fine of Rs. 1,00,000/- in lieu of confiscation. He also ordered enhancement of assessable value to £ 446.5 per M.T. FOB as against the declared value of US $ 550 per M.T. CIF. The Additional Collector further imposed a penalty of Rs. 25,000/- under Section 112 of the Customs Act, 1962.
2. The facts in brief are that the appellants imported the above consignment of copper Ash/Dross for which they filed a Bill of Entry dated 30-12-1988. The value of the consignment was declared at Rs. 4,36,981/- based on the Invoice value in US $ under Invoice No. 6288 dated 2-11-1988 raised by M/s. Sriji Enterprises, USA. The unit price was declared at US $ 550 M.T. CIF as per Invoice. On import the goods were examined and sample therefrom subjected to laboratory test and as a result the goods were found to be Copper Dross (60% Copper Metallics). As regards the value declared of the goods the department relied upon the Metal Bulletin dated 1-9-1988 relating to the value of Copper Ash/Dross and based on that the department concluded that the price of Copper Dross containing 60% metal would work out to £ 482.9 FOB. Thereupon a show cause notice dated 14-2-1989 was issued calling upon the appellants to explain why the value of the consignment should not be enhanced and why the goods should not be confiscated for mis-declaration under Section 111(m) of the Customs Act, 1962 and for imposing a penalty on the appellants under Section 112 thereof. The Additional Coller adjudicated the case and passed the impugned order after considering the submissions made by the appellants confiscating the goods and imposing penalty on the appellants as well as enhancing the assessable value.
3. Shri Chandrasekharan, learned counsel appearing for the appellants submitted that the Additional Collector was wrong in not accepting the Invoice value. He referred to the findings of the Additional Collector in this regard. The Additional Collector had observed that it is an internationally accepted practice that whenever goods are sold against a contract in the international trade the seller’s Invoice always shows the Invoice number and the contract number separately because the contract is entered into much earlier than the date of shipment when the Invoice is made out. He relied upon the contracts entered with different suppliers as Charney Ltd. USA where all the Invoices showed contract number and the Invoice number separately. The Additional Collector further found that the supplier in this case did not allot any contract number but merely allotted an Invoice number in a chronological order, and going by the chronology of the Invoice dates, the contract for the present import could not have been in August, 1988. Another point was there was no evidence of the contract copy having been sent and returned by the appellants. Therefore, he held that the particular contract for the present import No. 6288 dated 4-8-1988 was not valid, and enhanced the price to that higher one prevailing in September 1988. The learned counsel urged that the above reasoning was incorrect because the very same Customs House not questioned the authenticity of contract in respect of invoices for consignments imported from same supplier which also were similar to the Invoice produced for the present import. He referred to the contract No. 6297 dated 7-8-1988 wherein Invoice value of US $ 500 had been declared. He further contended that legally there is no basis to conclude, as the Addl. Collector had done, that a valid contract would come into existence only on return of the signed copy of the offer. The contract No. 6288 dated 4-2-1988 had been signed by both the suppliers and the appellants as the importers. The learned counsel further questioned the reliance placed by the Customs House on the Metal Bulletin for determining the assessable value by pointing out that even according to the Bulletin itself the Bulletin is only providing a guideline relating to the price of the Metal and is meant only as a basic guideline for the calculation of prices which depend on several other factors. The Metal Bulletin therefore, the learned counsel urged, is no indicator of the price prevailing in the market and it does not decisively lay down the price at any point of time. He further pointed out that even according to Rule 8(2) (iii) of the GATT Valuation Rules, valuation should not be based on domestic price in the country of exportation. There is also no finding by the Additional Collector about the extra remittance or that the importer or the supplier were related persons. The learned counsel cited and relied upon the case law reported in 1988 (34) E.L.T. 65 of the Tribunal in the case of Junta Traders v. Collector of Customs, Bombay wherein the Tribunal held that under-valuation cannot be held to be proved if the department fails to produce evidence of comparable value of identical goods. Reliance was also placed in the Tribunal’s decision in the case of Orient Enterprises v. Collector of Customs, Cochin, 1986 (23) E.L.T. 507 wherein the Tribunal hold that the charge of under-invoicing must be supported by evidence by prices of contemporaneous imports of such or like goods. Further, it was pointed out that the transactions with the suppliers were all through Bank and the documents clearly show that the import was pursuent to an agreement, and any doubts that the department may have about the contracts would not erase the validity of the transaction, especially when the department has not produced any material evidence of under-invoicing. Shri A.S. Sunder Rajan, learned D.R. appearing for the department contended that the central issue in the case is not so much of valuation but would be one relating to the date on which the contract for the supply of the present consignment was entered into between the foreign supplier and the appellants. The learned D.R. referred to the reasonings of the Addl. Collector in the impugned order by which he had validly concluded that there was no such contract. Learned D.R. also supported the reliance on the Metal Bulletin for determining assessable value and relied upon the case law reported in 1989 (40) E.L.T. 207 Metal Alloy v. Collector of Customs wherein the Tribunal had upheld the reliance placed on international prices for determining the assessable value.
4. We have carefully considered the submissions made by the learned counsel and the learned D.R. The Addl. Collector had for the reasons referred to the above in his order and held that there was no contract in August, 1988 for the present import and had on this finding proceeded to determine the value at a higher level than declared, based on the Metal Bulletin published in London. We find that the finding of the Addl. Collector is not well-founded because admittedly there is a contract dated 4-8-1988 signed by the supplier and the appellants herein for the supply of Copper Ash/Dross at the price as per the Invoice. Merely because there is no evidence that the duplicate of the contract had been signed and returned to the supplier, that itself would not be a ground, in our view, to discredit and disbelieve the contents of the contract itself. We further find that in another case of import from the same supplier effected by M/s. Ampex Trading Co. Bombay adjudicated by the Addl. Collector in his Order No. S/8/110/89-SIB/165/88, dated 4-7-1989, the import was in pursuance of a contract No. 6297 of 7-8-1988 where the Addl. Collector had accepted the validity of the contract having comparable price level while at the same time in the present case for the same supplier in the same circumstances, he has not found it fit to accept the contract as a valid one. Therefore, there is lack of consistancy in dealing with the value declared for imports from the same supplier, because if it was held that for the present import there was no contract, then the subsequent import referred to above should also have been similarly treated. In this context the absence of evidence of any extra remittances, or of any special relationship, and the fact that the transactions were through Banks, would also go to strengthen the appellants case. Therefore, the findings of the Addl. Collector relating to the validity of the contract of 4-8-1988 for the present import are not sustainable. As for the reliance placed on the Metal Bulletin for arriving at the valuation we find that for discarding the Invoice value for the purposes of Section 14 of the Customs Act, 1962 the department should produce evidence of contemporaneous import of similar or identical goods at higher values. This has been well settled by the case law cited by the appellants. We find that not only is there no evidence of value of similar or identical goods imported contemporaneously but the department had also not given any finding with regard to the evidence produced by the appellants to the effect that values comparable to those declared by them had been accepted in Bombay Customs House for the same goods. In the circumstances, therefore, merely based on the prices published in Metal Bulletin, which itself declares in the preamble “the following table represents our evaluation of current market values in the U.K….Owing to the nature of scrap market it is impossible to quote precise prices and it is important that the indication should be read in conjunction with the relevant market comment” and without any supporting evidence of contemporaneous import, the value so determined will not be in accordance with the provisions of Section 14(1) of the Customs Act, 1962. In this view of the matter, therefore, the Addl. Collector’s order is not maintainable. It is set aside and the appeal allowed.