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 th