Commissioner Of Customs, Mumbai v. Mukund Ltd.

[Order per : Gowri Shankar, Member (T)]. - M/s. Mukund Ltd. imported in July, 1993 a consignment of 20 metric tonnes of manganese of 99.7% purity. The invoice for the consignment, and the Bill of Entry filed for its clearance indicated the value to be US $ 1,225 per metric tonne cif. The department had noticed import of the identical commodity by M/s. Duggar Fibre Pvt. Ltd. at US $ 1,355 per metric tonne as shown in the invoice dated 30th April, 1993 of the supplier China Industrial Resources Limited. The prices in the Bulletin of the London Metal Exchange (LME for short) also indicated that value for manganese of such purities were between US $ 1,370 to 1,420. On this basis, proceedings were commenced proposing to enhance the value by US $ 130 per metric tonne. The Assistant Collector confirmed this proposal. On appeal from this order, the Collector (Appeals) said that the department was wrong in applying the prices in the April invoice, as it was not a contemporaneous import. He said that the LME prices were not a final determinant but indicated as possible tonnage of prices and noted that the appellant before him had stated that he had arrived at a negotiated price. He allowed the appeal. Hence this appeal by the Commissioner.

2. We have heard the departmental representative and perused the papers. Respondent is absent.

3. There is a gap of three months between the importation under consideration and the importation, the value of which was sought to be applied by the department. Whether one importation is contemporaneous to another does not depend solely on the interval of the time between the two importations. It also depends upon how stable and fluctuating the market is. In the case of a commodity in which fluctuates the price prevalent, the gap of a week or two may be significant, whereas in the case of a commodity the price of which is relatively stable this gap may not matter. The dismissal of the earlier invoice solely on the ground that it was three months earlier and hence is not contemporaneous to the import under consideration is not correct. As a matter of fact, LME Bulletin prices stated for manganese for May of minimum purity of 99.9% did not vary from January, 1992 till July, 1993. The fact that the price of manganese of minimum purity of 99.7% was around US $ 1,420 suggests that prices were around this generally in July. The LME prices can be considered to be a fair indicator of the prevailing market price. The contention that the importer negotiated the price with the buyer and hence quoted lower rate may be true. The price under Section 14 is not a negotiated price but the deemed price prevailing in the general international market conditions of the supply and demand. In our view, the invoice of April, 1992 ought to have been accepted.

4. Accordingly appeal is allowed. Impugned order set aside and the Assistant Collector’s order restored.