G.P. Agarwal, Member (J)

1. This appeal is directed against the impugned Order-in-Appeal passed by the Collector of Customs (Appeals), Bombay.

2. Factual backdrop : M/s. Hindustan Equipment Engineering Co., appellants herein and M/s. Krishna Co. are associate firms (the sole proprietor of the former firm that is to say, appellants firm has a 50% partnership share in the latter firm). It is the case of the department that the appellants imported a consignment of 12 cases of Synchronizer Cones and presented for its clearance licence No. 0314617, dated 6-1-1982 stood in the name of M/s. Chandiramani, Delhi and 2028886, dated 21-1-1981 stood In the name of M/s. Krishna Co. The unit price for the Synchroniser Cones was shown In the import document at US $ 3.49 per piece. The importers produced two telex messages exchanged between Shri S.N. Goenka of M/s. Krishna Co. and M/s. For Export. M/s. For Export has agreed to supply M/s. Krishna Co. the goods at the price of US $ 3.69 CIF each provided M/s. Krishna Co. receives a commission of US 20 Cents per piece from M/s. For Export. From this correspondence the department tentatively formed an opinion that although the appellants had declared that no indenting Agent's commission is payable the price of US $ 3.69 CIF per piece is subject to M/s. Krishna Co. receiving the commission of US 20 Cents per piece. Hence the price per piece would be US $ 3.89 CIF (US $ 3.69 + 0.20) per piece. As regards the import of the subject goods against the licences produced by the appellants the authorities concerned formed the tentative view that the subject goods are not covered under the said licence. As a sequel thereof a show cause notice calling upon the appellants to show cause as to why the imported goods be not confiscated and penalty be not imposed was issued. In reply while abjuring their guilt the appellants contended that the value declared by them be accepted and the subject goods be assessed under Heading 84.63(1) of the Customs Tariff and not under Heading 87.04/06 as contended by the department. After the usual adjudication proceedings the adjudicating authority ordered that the value for assessment be computed at the price of US $ 3.69 CIF. The adjudicating authority also held that the subject goods are classifiable under Heading 87.04/06(1) as parts and accessories of Motor Vehicles. It further held that as regards the ITC angle the goods of the value of Rs. 19.533/- were not covered by the licence. Consequently he ordered for the confiscation of the said goods giving an option to the appellants to clear the goods on payment of a redemption fine of Rs. 19.000/-. Being dissatisfied with the adjudication order the appellants preferred their appeal before the Collector of Customs (Appeals), Bombay who by his impugned order confirmed the findings of the Assistant Authority with respect to the valuation and the classification but set aside his finding to the effect that the goods valuing Rs. 19,533/- was not covered under the licence No. 2866436 and also granted consequential relief. Hence the present appeal.

3. We have heard Shri M.A. Rangaswamy, learned counsel for the appellants and Shri J. Gopinath, learned SDR for the respondent.

4. Shri Rangaswamy, learned counsel for the appellants contended that the value of $ 3.49 per unit declared by the appellants be accepted. He submitted that the price @ $ 3.49 per piece was a negotiated one and that the L/C was open for this price only. Importers and suppliers had no interest in the business of each other and that this price was available to any other importer and that the invoice price @ $ 3.49 per unit only was remitted. He further submitted that no evidence of higher value for such or like goods was cited by the department and therefore the declared value be accepted. He emphasised that the authorities below failed to appreciate that M/s. Krishna Co. and the importers being associate firms, question of payment of commission of