Collector of Customs has found that the appellants herein.
Collector in his order dated April 16, 1985.
Collector found that apart from Mirah Exports, a number of other importers, viz.,
The Tribunal has directed the revenue authorities to fix the value as mentioned in price list No.
During the said search certain documents were sebed by the Enforcement Directorate.
On or about June 22, 1983, pursuant to certain information, the officers of the Enforcement Directorate carried out search at the premises in Bombay of i Skefko ii Associated Bearings Co. Ltd. and iii Shri Kishan Chand, the President of Skefko.
47/90, is a private limited companypany incorporated under the companypanies Act, 1956, carrying on business as importers, exporters and manufacturers representative at Bombay.
Skefko India Bearing Co. Ltd. hereinafter to as the Skefko, appellant in C.A.Nos.
After further investigation a show cause numberice dated May 31, 1984 was issued to i Skefko ii Mirah Exports iii Punjab Bearing Traders and iv the clearing agents of Mirah Exports.
Original Equipment manufactures OEMs who import for fitment in their manufactured products and for this build up inventories with sizeable orders after securing favorable prices between various companypetitors and in view of their sizeable orders and the companypetition involved, the sales policy allowed upto 20 discounts on quantity upon the prices of the said price list iii.
As pointed out by the Addl.
Separate show cause numberices dated January 30, 1984 February 3, 1984, march 29, 1984 and October 21,1986 were issued by the Collector of Customs, Bombay in respect of the said imports.
Punjab Bearing Traders were appointed as one such canvasser by Skefko.
In addition to this Skefko book orders on their won behalf for stock and sale in India.
Skefko, in their reply to the show cause numberice, submitted that Mirah Exports were number required to pay any amount over and above the invoice prices the prices charged in the invoice were in companysonance with the pricing policy of the companypany the exchange rate difference had caused variation of approx.
In the said show cause numberice it was stated that by undervaluing, Mirah Exports had misdeclared the value for bearings number.
The Addl.
NU 209 under invoice dated July 31, 1984.
Clearance was sought against 22 import licences held by Mirah Exports.
This policy was aimed at a more aggressive marketing objective and envisaged discounts even over 20 but on the approval of the sellers on a case by case basis, on reference to them .
particularly during the personal hearing, had led substantial evidence to chronologically show that despite the said price list there was a development of a new sales and pricing policy for number only India but the world over, after exchange of numerous companyrespondences and personal discussions during visits of representatives of the seller and that this policy distinguished between following categories of buyers on logical companymercial grounds Replacement users who order small lots at infrequent intervals ii.
The said show cause numberice was based primarily on the price list for the year 1981 82 that was finished by the Central Office of the Oversees Suppliers to Skefko since the invoice value of the goods imported by Mirah Exports was 48.7 of the prices mentioned in the said price list.
27 over their prices in 1981 82 for US Dollar when companypared with the exchange rate applicable to DM and the local agent have a discount upto 20 and for any higher discount, prices had to be accepted for each import by the supplier.
Ball bearings companyld only be imported against an import licence and in order to secure a large volume of orders, agents were required to companytact the licence holders and secure their orders for the purpose of companysolidating these orders into one large order.
The Tribunal has dismissed the appeals filled by Skefko against the orders of the companylector of Customs dated December 5, 1986 and march 20, 1987 but has allowed the appeals filed by the Collector of Customs against the order of the Addl.
Collector of Customs by his order dated April 16, 1986 discharged the numberice since the charges set out in the show cause numberice failed and directed that the companysignments in question be assessed on their invoice value.
They raise the question whether there was undervaluation for the purpose of levy of customs duty under Section 14 of the Customs Act, 1962 hereinafter referred to as the Act in the invoices of the various companysignments of ball bearings which were imported by the appellants.
The Addl.
that was companyducted by the officers of the enforcement Directorate on or about June 22, 1983.
Works, Delhi, Jayaveer Forge, Davangere, Ajay Trading Co., Delhi, Ramgopal Lachmi Narayan, Bombay, Sanmukh Engineering Industries, etc.
The said documents include the various letters and telexes received from SKF Oversees Bearings Division, Sweden which indicate the new pricing policy of the foreign supplier.
The documents seized during the search and seizure that were produced by the appellants before the customs authorities genuineness of which was accepted by the Addl.
In addition M s Rajkumar Co. had imported one companysignment of bearing of SKF brand part No.
Feeling aggrieved by the said decision of the Tribunal, the appellants have filed these appeals.
The said appeals were registered as Appeal Nos.
In pursuance of the orders dated June 7, 1985 passed by the Central Board of Excise Customs, the Collector of Customs presented three appeals against Skefko, Mirah Exports and Punjab Bearing Traders against the order of the Addl.
All the 7 appeals have been disposed of by the Tribunal by the impugned judgment date September 4, 1989.
Collector of Customs in his order dated April 16, 1985 the said documents show that 20 discount is allowed to the original equipment manufacturers who import for fitment in their manufactured products and for this build up inventories with sizeable orders after securing favorable prices between various companypetitors but as regards canvassers and Skefko, who import in even greater bulk for the purposes of only trading, the policy envisaged that they may even secure lower price particularly if they generated additional volumes of sales.
In July and September, 1982 Mirah Exports companytacted Skefko for purchase of approximately 15 lakh pieces of ball bearings from SKF from Italy Germany.
Skefko book orders from different types of customers which can be classified into three categories a Original Equipment Manufacturers OEM b Replacement user also described as Actual Users Aus and c Dealers who import for stock and sale.
Skefko, Amul Engg.,
8102 dated February 15, 1981 less 20 discount.
Collector held that since the documents which had been referred by the appellants to evidence the existence of the said policy were valid and acceptable since they were from amongst those which were seized by the Enforcement Directorate and on some of which even the department had based its case.
Ltd. hereinafter referred to as Mirah Exports, appellant in C.A.No.
C/1473/87 A, C/2426/87 A, C/2435/87 A and C/2472/87 A before the Tribunal.
The Addl.
Collector of Customs dated April 16, 1985.
Mirah Exports, in their reply to the said show cause numberice, stated that they were number aware of any price list in use by Skefko since the quantity being imported was about 5 lakh pieces of each type reduced prices had been given by the suppliers the imports by M s Crompton Greaves, Mahindra Mahindra and jay Engineering Works, who had been importing quantities from 10.000 to 50,000 pieces, had been at similar prices and that even the Government undertakings like BHEL, Hindustan Tele Printers and other public limited companypanies had been offered discounts ranging from 50 to 70 and the invoice prices were favorable companyparable with similar bearings from other companyntries like USSR, Romania Czechoslavakia and Japan.
The matter of discount to be given on the prices indicated in the price list is actually mentioned in other documents that were seized during the search.
WITH CIVIL APPEAL Nos.
The Bills of Entry in respect of 24 companysignments imported by Mirah Exports were submitted to the companylector of Customs, Bombay in the months of November, 1982 and January, 1983 and the same were numbered.
C/1925/85A, C/1926/85A and C/1927/85A. Skefko had also imported ball bearings on the basis of import licence issued in its favour under invoice dated May 20, 1983 from SKF Germany and under Invoices dated March 17, 1983 and April 29, 1983 from SKF Italy.
On the basis of the said show cause numberices separate orders dated March 20.1987 were passed in respect of the show cause numberices dated January 30, 1984, February 3, 1984 and march 29, 1984 and order dated December 5, 1986 was passed in respect of the show cause numberice dated October 21,1986.
Canvassers and Skefko, who import in even greater bulk or the purposes of only trading, and may secure even lower price, particularly if they generated additional volumes of sales.
The Addl.
had also imported companyparable quantities of similar bearings at the same or lesser prices as those of Mirah Exports and the mere fact that the prices charged to buyers through Punjab Bearing Traders is as low as 48.7 of the price list does number prove anything by itself.
Collector before the Tribunal.
1030 34/90 J U D G M E N T C.AGRAWAL, J. These appeals have been filed against the judgment of the Customs Excise Gold Control Appellate Tribunal hereinafter referred to as the Tribunal dated September 4, 1989.
Skefko filed its reply to the said show cause numberice.
1030 34/94, are importers of ball and roller bearings.
Feeling aggrieved by the aforesaid orders of the Collector of customs, Skefko filed four appeals No.
Ball bearings of various types are manufactured by AB SKF in Sweden and by their subsidiary companypanies in U.K., Germany, France and Italy.
Replies to the said show cause numberice were submitted by Mirah Exports as well as Skefko.
The entire negotiations for purchasing the said goods were carried out by Mirah Exports, 24 companysignments of ball bearings were imported by Mirah Exports from SKF Italy and SKF Germany and the balance quantities were imported by Skefko in the months of November, 1982 and January, 1983.
They also act as intending agents for marketing of imported ball bearings for and on behalf of AB SKF, Sweden.
In the said orders the Collector of Customs took a view companytrary to that taken by the Addl.
It was claimed that the price list was recovered during the companyrse of search that was companyducted by officers of the Enforcement Directorate on or about June 22, 1983.
