F.S. Gill, President

1. Originally preferred as a revision application to the Central Government, the matter has been transferred to us as an appeal and is being disposed of as such. The present appeal is directed against the Order-in-Appeal dated 28-4-1977 passed by the Appellate Collector of Customs, Bombay.

2. For a proper appreciation of the issues involved in the present appeal, it would be useful to briefly narrate the facts of the case. A contract was entered into between The Minerals Metals Trading Corporation of India (MMTC), hereinafter called the Buyer, and M/s. Empresa Minera Del Peru (M1NERO-PERU), hereinafter called the Seller, and this contract is dated 6-3-1972. As per the terms of the contract, the seller was to supply to MMTC Electrolytic Copper Wire Bars corresponding to ASTM B5/43 specifications. The price clause is also relevant and is reproduced below : -

"The monthly average shall be taken as the price basis.

The purchase price for each shipment is therefore to be understood as the monthly average of the Peruvian Producers Price for the month prior to the contracted month of shipment."

3. The present dispute relates to a consignment of 999.923 MT of the said goods shipped on 19-10-1974 and imported at Bombay port on 4-11-1974. The invoice for the goods dated 21-10-1974 showed two prices for the combined quantity of 999.23 MT. The relevant portion is quoted as below : -

xxx xxx xxx

The price of £474.91 per MT adopted for the quantity of 500.000 MT was not accepted for assessment purposes by the lower authorities, but the price of the balance quantity of 499.923 MT was, however, accepted. For the quantity of 500.000 MT referred to earlier, the appraised value was enhanced to £ 630.76 per MT. This was done, as per the submissions made by the learned representative of the respondent, in accordance with the stipulations of the contract dated 6th March, 1972 i.e., with reference to the average price for the goods prevailing in September, 1974. Aggrieved with the order of the Deputy Collector, the appellants preferred an appeal before the Appellate Collector of Customs, which was dismissed and the order of the Deputy Collector was upheld. Aggrieved by the order of the Appellate Collector, the appellants filed a revision application before the Central Government, which is now before us as an appeal.

4. Before appreciating the contentions of the parties, we would like to state here that a clarification was agreed upon between the contracting parties on 13th October, 1972. It was stipulated, that inter alia : -

"in regard to the price, it was agreed that the average Peruvian producer's price for the month prior to the contractual month of shipment would apply to each monthly lot, irrespective of the month in which the shipment actually takes place."

5. Shri Oberoi, the learned Advocate for the appellants, has drawn our attention to the memorandum of agreement dated 27th of August, 1974, which by mutual consent between the parties, amended the contract dated 6-3-1972. It is his contention that the price of £474.91 per MT is in accordance with the terms of the contract which will come to after all the relevant documents connected therewith are added together. According to him, therefore, the invoice price for the balance lot of 500.000 MT should have been accepted for assessment purposes, being in conformity with the provisions of Section 14 of the Customs Act. He also emphasised the fact that the appellants have no special relationship with the foreign suppliers of the goods, and all relevant documents pertaining to the transaction in 1983 were made available to the Customs authorities. He, therefore, submitted that the contract price should be as mentioned in the invoice, which correctly reflected the actual value of the goods under the Act, and the action of the lower authorities was justified in enhancing the same.

6. It is pertinent to observe that in the same lot, which had arrived by the same ve