V.T. Raghavachari, Member (J)

1. These five appeals were heard together by consent of all parties concerned since several common questions of fact and law arise for determination in all these appeals. Sri S.N. Nankhani, Advocate appeared on behalf of M/s Babcock Venkateshwara Hatcheries Private Limited and Sri J.R. Cama, Advocate of M/s Crawford Bayley Co. appeared on behalf of M/s Rallis India Limited. Sri Mahesh Kumar, Senior Departmental Representative appeared for the respondent Collector.

2. M/s Babcock Venkateshwara Hatcheries Pvt. Limited (hereinafter to be referred to as BVH Ltd. for convenience) had, under an agreement entered into with M/s Babcock International Corporation, USA, agreed to purchase and import one day old GP layer chicks as well as GP broiler chicks, prices for these varieties being fixed under an agreement. M/s BVH Limited had requested M/s Rallis India Ltd., who had Export House licences in their favour, to open letters of credit in favour of M/s Babcock International Corporation, to cover such imports. It is in respect of such imports, as well as later imports directly under licences in favour of M/s BVH Limited, that the disputes how under issue had arisen. We shall, in the first instance, give details in respect of each of the appeals separately, so that the disputes arising in each proceeding may be distinctly understood. Thereafter we shall take up for consideration the general issues arising in all these appeals and, on the basis of conclusions arrived at on such general questions, apply the same to the particular facts in each proceeding to arrive at a proper decision.

3. Appeals No. 963/80 and 964/80(A)

The agreement between M/s BVH Limited and M/s Babcock International Corporation relating to these appeals is dated 25-2-1974. It purports to be for a period of three years, to be effective till 31-12-1976. The prices agreed thereunder are mentioned to be as follows :

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M/s Rallis India Limited filed a Bill of Entry for clearing 35 cartons containing 1775 chicks, the birds arriving on 18-9-1976. But on examination it was found that the number of chicks that had arrived was much larger, the number found by the authorities on actual counting being 2754. Similarly, M/s Rallis India Ltd. had filed another Bill of Entry for a consignment of 47 boxes said to contain 3900 chicks, the said consignment arriving on 10-10-19/6. The first consignment consisted of GP Layer Stock and the second of Broilers. In the invoices the price payable had been shown as follows:

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The invoice further read that the price was FOB New York, air freight being shown separately, the total of the amount payable under the invoice being mentioned as 20,000 Dollars. So far as the Broilers are concerned the import invoice dated 21-9-1976 had shown the price as follows :

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In each of the invoices the price was mentioned as F.O.B. New York, airfreight being added thereto, to arrive at the total C F Bombay price shown.

Two show cause notices were issued with reference to these imports alleging that the prices declared and shown in the bills of entry were incorrect and were much lower than the actual prices and that there had thus been misdeclaration. It was also alleged that more quantity had been imported than declared in the invoices and bills of entry and thus there had been misdeclaration on that account also. Action was proposed, therefore, under the provisions of the Customs Act, 1962 as well as the Imports and Exports (Control) Act, 1947. Action was proposed thereunder against M/s BVH Limited as well as M/s Rallis India Limited.

M/s BVH Limited pleaded that the excess quantity had been sent by the exporter without their (M/s BVH's) knowledge and that so far as the price is concerned the same was the true price based on the agreement in respect of supplies. They contended that there was, therefore, no case of misdescription by them on either account. M/s Rallis India Limited stated that since M/s BVH