V.T. Raghavachari, Member (J)

1. The appellants, M/s. Automotive Enterprises, Bombay, imported two consignments of bearings of various sizes from the United Kingdom, the suppliers being M/s. Harvin Exports, London. They were main bearings with Part No. AJH 5285 and connecting rod bearings Part No. AJH 5286, prices respectively being shown as-

£ 0.58 and £ 0.69 FOB

When the goods were examined they were found to be Glacier Brand bearings. The department issued a show cause notice dated 18-2-1978 pointing out that the price list dated 7-2-1977 prevailing at the time of importation as supplied by the Authorised Indenting Agents M/s. Overseas Manufacturers Sales Company, Bombay, showed the correct prices for the main bearings and connecting rod bearings to be respectively-

£ 1.37 and £ 1.19

It was therefore charged that the appellants had misdeclared the value, rendering the goods liable for confiscation under Section 111(d) and(m) of the Customs Act read with Section 3(2) of the Import and Export (Control) Act, 1947. The appellants were called upon to show cause against such action being taken and also for payment of duty at the value suggested.

2. The appellants under their reply dated 14-4-1978 contended that the prices mentioned in their invoices were correct and proper and had been arrived at on negotiations and there had been no misdeclaration. They claimed that the sellers had purchased the subject goods in 1976 itself at the prices at which they were now disposed of (except in respect of certain items which were slow moving) and that as the sellers could not obtain better prices in spite of the time during which they had the goods in stock they were prepared to sell at the prices mentioned in the invoices and they were therefore the proper prices. They further claimed that the price list of 7-2-77 of A.E. Auto Parts (relied upon by the department) was only a mere offer and indicated the maximum prices and it could only be the starting point for bargaining and in fact M/s. A.E. Auto Parts themselves had sold certain Fiat engine bearings at half the prices mentioned in their price list.

3. On adjudication, the Collector of Customs, Bombay under his order dated 29-8-1978 rejected the contentions of the appellants and held that the prices mentioned in the invoices (and carried over in the Bills of Entry) were lower than the actual prices and hence the charges against the appellants had been established. He therefore ordered confiscation of the goods but gave option for redemption and also imposed penalties as follows:

xxx xxx xxx

The appeal against the said order to the Central Board of Excise and Customs was dismissed under order dated 29-1-1980. It is the revision petition preferred against the said order that, on transfer, is being dealt with and disposed of as an appeal under this order.

4. We have heard Shri N.C. Sogani, Consultant for the appellants and Shri A.K. Jain, Senior Departmental Representative for the respondent. Shri Sogani has cited several decisions in support of his contention that the prices mentioned in the invoices should be accepted as the proper prices unless the department is able to produce any other acceptable evidence to prove that the same was not the proper price. There can be no doubt that if a charge of misdeclaration is made against an importer it would be for the department to establish the said charge by acceptable evidence. But the same proposition would not be wholly correct so far as the assessment to duty is concerned. This is so because under Section 14(1)(a) of the Customs Act the value for purposes of assessment of duty would be the deemed value as provided for under the said Section, even if the invoice price is proved to be the true price as agreed to between the parties. The decision of the Bombay High Court in the case of Union of India and Ors. v. Glaxo Laboratories [MANU/MH/0087/1979 : 1984 (17) E.L.T. 284 (Bombay)] is authority for this proposition. It had been laid down therein tha