Important Point
The words “ordinarily sold or offered for sale” do not refer to the contract between the supplier and the importer but to the prevailing price in the market on the date of importation or exportation.

Order

The appeal by the assessee has been filed under-Section 130-E of the Customs Act, 1962 (hereinafter referred to as “the Act”) against the judgment of the Customs, Excise and Gold (Control) Appellate Tribunal (hereinafter referred to as “the Tribunal”) dated 12.7.1989.

2. The appellant, M/s. Rajkumar Knitting Mills (P) Ltd., imported 24 sets of ­second-hand water jet looms from Japan under Bills of Entry dated 27.7.1988. The said imports were made on the basis of a contract entered into by the appellant with M/s. Jinbo Boeki Shokal of Osaka, Japan on 1.12.1987 for the supply of 80 sets of second-hand “NISSAN” water jet looms. As per the invoice of the supplier dated 23.6.1988 the price of the said looms was 4,00,000 Japanese Yen per set. The goods had been shipped on 18.6.1988 and they arrived at the Indian Port on 26.7.1988. The appellant claimed that for the purpose of payment or customs duty the value of the goods should be assessed on the basis of the price indicated in the invoice. Similar goods (8 sets) had been imported from the same supplier in Japan by another firm, M/s. Hibotex Pvt. Ltd. on the basis of contract dated 2.5.1988 @ 7,00,000 Japanese Yen per set. The date of shipment was 25.6.1988 and the date of arrival at Indian port was 4.8.1988. A show-cause notice dated 7.10.1988 was issued by the Assistant Collector of Customs requiring the appellant to show cause why the value declared be not enhanced from 4,00,000 to 7,00,000 Japanese Yen per set. The appellant filed its reply to the said notice. After considering the said reply the Additional Collector of Customs passed the order dated 16.11.1988 whereby he enhanced the value of goods to 6,00,000 Japanese Yen per set. In the said order the Additional Collector has stated that two other consignments of similar goods (8 sets each) had been imported in May 1988 by M/s. N.V. Textiles and K.V. Textiles of Surat at the declared value of 5,00,000 Japanese Yen per set. The Additional Col­lector has held that the goods imported by M/s. Hibotex Pvt. Ltd. were identical in every res­pect, i.e., in the quantity and description of the goods and in the time and delivery of the goods and there was sufficient evidence to indicate that the value declared by the appel­lant is lower than the prevailing international market for the goods. Having regard to the fact that the appellant had contracted for a larger quantity and was eligible for quantity discount, the Additional Collector, on the basis of the letter of suppliers dated 7-9-1988, allowed a quantity discount of 1,00,000 Japanese Yen per set and assessed the value at 6,00,000 Japanese Yen per set. The appeal filed by the appellant against the said order of the Additional Collector has been dismissed by the Tribunal by the impugned judgment.

3. Shri D.N. Mehta, the learned counsel for the appellants, has sub­mitted that the Tribunal as well as the Additional Collector were in error in basing themselves on the date of shipment and the date of importation for the purpose of assessing the value of the goods. The submission is that the relevant date for assessing the value of the goods for the purpose of payment of customs duty under Section 14 of the Act is the date of the contract and that since the contract under which the appellant had imported the goods was made on 1.12.1987 while the contract under which M/s. Hibotex Pvt. Ltd. had imported the goods was made on 2.5.1988, nearly five months after the contract of the appellants, the value of the goods imported by the appellant could not be assessed on the basis of price of the goods imported by M/s. Hibo­tex Pvt. Ltd. Shri Mehta has also submitted that since the quantity of goods for which contract was entered into by the appellant was much larger than the quantity of goods imported by M/s. Hibotex Pvt. Ltd. as well as M/s. N.V. Textiles and K.V. Textiles, the price of the goods indicated in the invoices of the said parties could not afford the basis for assessing the val