I.J. Rao, Member (J)

1. This was originally filed as a revision application before the Secretary to the Government of India and on transfer to the Tribunal is being dealt with as an appeal.

2. M/s Maheshwari Trading Corporation, the appellants, filed a Bill of Entry on 19th September, 1980, for the clearance of a consignment of 8" zip fasteners and declared its value as being 0.97 Singapore dollars per dozen. On examination, the goods were seen to be LFC 32' 8" type with pin lock slide. The value declared on the Bill of Entry appeared to the Customs authorities to be on the lower side and the party was asked to explain the same. The explanation given not being considered satisfactory a Show Cause Notice was issued stating that the price of the LFC 32' 8" zip fasteners was approximately Rs. 0.56 paise per piece and that this price was based upon the catalogue price of the manufacturers M/s YKK Zippers (Singapore) Pvt. Ltd. It was also stated in the Show Cause Notice that on market inquiry it was confirmed that the zip fasteners imported more LFC 32' 8" with pin lock slide fasteners and the goods are genuine YKK products. According to the notice, the price of such goods in the Delhi wholesale market from Japan and Singapore is approximately Rs. 22 per dozen with the slide fasteners. The Customs in the notice further recorded that a consignment of similar goods of 9" was cleared at the price of Rs. 0.62 paise GIF per piece under a Bill of Entry dated 11-9-1980. They also added in the notice that according to the price list for YKK zippers from M/s YKK Zippers (Singapore) Pvt. Ltd., effective from 1st June, 1980, the price of 8" LFC 32 with pin lock was Japanese yen 1594 GIF Bombay. The price of the same goods after 1st August, 1980 from Japan and Singapore was c.i.f. 1505 Japanese yen per piece. This information according to the Customs was obtained from the representative of the YKK Foreign Trade Department when he was in Delhi. The Customs view that the zip should be valued at Rs. 0.56 paise per piece was sought to be substantiated on the basis of this information. The appellants were asked to show cause why the value of the goods should not be enhanced from Rs. 0.30 paise per piece and c.i.f. as declared to Rs. 0.56 paise per piece and differential duty recovered. They were also asked to show cause as to why penal action should not be taken against them and the goods confiscated under Section 111(d) of the Customs Act and penalty should not be imposed under Section 112.

3. In reply, the appellants denied the allegations. They denied that the market price in India had any relevance for arriving at assessable value of the goods, and stated that under Section 14 of the Customs Act, assessable value of the goods is the price at which goods are ordinarily sold in the course of international trade, the buyer and the seller having no interest in each other in any manner and the price being the sole consideration. They further explained that in the imported consignment the appellants did not have the choice of colours. They explained that items which are left over and in deals where any kind of choice is not given in the buyer at all, but the goods are saleable in India, they are sold at a depressed price. They stated that they negotiated the price of exporting company at Singapore and the price was fixed at 0.97 Singapore dollars per dozen GIF at which price the exporters had been supplying to the other Indian buyers also. Further, according to the appellants, they had direct negotiations and dealings with the supplier without using Indentors or Commission Agents thus giving them the advantage in price. They also stated in reply to the Collector that several consignments of similar nature were cleared at Delhi from the same supplier at the same price. They denied any undervaluation and said that the Department had no evidence to support the allegations. They also denied the correctness of the market value as ascertained and alleged