Ruma Pal ORDER
Ruma Pal, J.
1. M/s. Eicher Tractors Ltd., the appellant before us, manufacturers tractors and tractor engines in India. From 1955 the appellant imported bearings of a specific size for their tractors and tractor engines from M/s. NTN Corporation, Osaka, Japan. This 33 year relationship was snapped in 1988 when the appellant started utilizing bearings manufactured for them in India by M/s. HMT Ltd. The Japanese vendor was left with a stock of the bearings which had been manufactured by it for the appellant anticipating the appellant's continued custom. Not finding any customer for the bearings, by letter dated 12th February 1993 the vendor's agent in India offered to sell the 1989 stock of 3579 bearings to the appellant at a price of Japanese Yen (JY) 826 per piece. The appellant found the offer competitive and agreed to buy the bearings from the vendor at the price offered. An order was placed by the appellant on the vendor on 17th April 1993. The bearings were shipped from Japan and arrived in India. The appellant filed the Bill of Entry on 3rd December 1993 together with the invoice dated 6th October, 1993 with the Customs authorities.
2. The Assistant Commissioner of Customs was not satisfied that the value of the bearings as declared by the appellant was the value of the bearings for the purposes of levying customs duty. He issued a notice on 14th December 1993 to the appellant. The appellant gave a detailed reply setting out the facts noted earlier. The Assistant Commissioner noted that the declared price was only 23% of the vendor's list price and was of the view that the 77 per cent discount allowed to the appellant by the vendor was not normal and could not be accepted for the purpose of determining the price of the bearings under Section 14 of the Customs Act, 1962 and Rule 4 of the Customs Valuation (Determination of Price of Imported Goods) Rules, 1988 (referred to briefly as the 'Rules'). The Assistant Commissioner determined the price of the bearings at JY 2507 per piece under Rule 8. In arriving at this figure, the Assistant Commissioner took the list price of the vendor and deducted 30 per cent on account of discount, which, according to the terms of agency between the vendor and its Indian agent, was the maximum permissible discount allowable.
3. The appellant preferred an appeal before the Commissioner of Customs (Appeals), Mumbai. The Commissioner allowed the appeal. The respondent preferred an appeal before the Customs, Excise and Gold (Control) Appellate Tribunal. The Tribunal allowed the appeal by its order dated 23rd September 1998. The Tribunal accepted the reasoning of the Assistant Commissioner and relied upon the decision of this Court in Padia Sales Corporation v. CC MANU/SC/0386/1993 : 1993ECR337(SC) to hold that "specially quoted price was not acceptable in........