CCE Vs. CAPITAL STEEL CORPORATION

JUDGEMENT

(1.) THE appellants entered into MOA with the foreign supplier to purchase ships for breaking up purpose and under the said MOA, they agreed to transact the said goods for US $ 156 per LT. The appellants after taking physical delivery and upon inspecting the vessel noticed unexpected losses and removals to the ship and accordingly mutually agreed to lower the price than that was mentioned in the original MOAs. The seller and the appellants mutually agreed to amend the MOAs and thereafter addendum to MOAs were made which were part and parcel of the original MOA and they mutually agreed to reduce the price from US $ 156 per LT to US $ 148 per LT. Thereafter, the appellants opened the LC with the Bank and the foreign supplier issued commercial invoice and bill of sale and the appellants accordingly filed bills of entry at the reduced price.

(2.) PROCEEDINGS were initiated against the respondent for enhancement of assessable value on the basis of original MOA entered by them with the foreign supplier, which culminated into an order passed by the original adjudicating authority, holding against the appellant.

(3.) WE find that the issue is no more res -integra and stand settled by the judgment of Hon'ble Supreme Court in the case of CC (Prev.)Gujrat v. Atam Manohar Ship Breakers Ltd. as reported in, 2009 (233) ELT 145 (S.C.), laying down that the subsequent price reduction by addendum to Memorandum of Agreement cannot be made the basis for adopting the lower assessable value. We also note that the Larger Bench decision in the case of CC Bhavnagar v. Lucky Steel Industries as reported in, 2006 (201) ELT 510 (Tri -Mumbai) has held that the reduced value cannot be allowed for the purpose of Customs valuation.