COMMISSIONER OF CUSTOMS, BHAVNAGAR Vs. MAHAVIR SHIP BREAKERS

JUDGEMENT

(1.) THIS appeal has been filed by the Revenue against the Order of the Commissioner (Appeals) made on 8 -10 -2001 to the extent to which the appeal of the importer was allowed on the valuation of the vessel.

(2.) THE respondent purchased an old vessel M.V. Kupa for breaking at Ship Breaking Yard, Alang, under Memorandum of Agreement dated 2 -7 -1998. The vessel was agreed to be sold for US $ 9,60,750/ -. It appears that the vessel was imported into India on 18 -7 -1998. Thereafter, the Memorandum of Agreement was modified by the first addendum made on 20 -7 -1998 and the physical delivery was taken on 23 -7 -1998. One more addendum was made on 25 -7 -1998 after the delivery was taken. According to the importer, by virtue of the modified Memorandum of Agreement, the purchase price of the vessel was brought down to US $ 9,45,000/ - as against the original Memorandum of Agreement price of US $ 9,60,750/ -. The importer presented Bill of Entry with the reduced price of US $ 9,45,000/ -. The Bill of Entry was registered on 3 -8 -1999. In the assessment proceedings, the Superintendent, on the basis of the material on record, came to a finding that the importer had claimed a reduction on the ground that the Memorandum of Understanding was amended without there being any convincing reason. It was held that the ship was purchased on AS IS WHERE IS BASIS and as per the Memorandum of Understanding, it was to be delivered intact with everything on board. It was also found that there was no condition in the Memorandum of Agreement for reduction of value and that the claim for reduction was not justifiable. The Original Authority relied upon the decisions of the Honble Calcutta High Court in Hindustan Motors Ltd. v. Union of India, reported in AIR 1954 Calcutta 156; and Jasoda Jiban Saha (P) Ltd. v. S.K. Chatterjee, reported in AIR 1961 Calcutta 195, for the proposition that the value was to be taken as the value at the time and place of importation. He accordingly assessed the value of the vessel at US $ 9,60,750/ -.

(3.) THE Appellate Commissioner while dismissing the appeal of the importer on the issues relatng to Bunkers and provisions and stores, allowed the appeal of the importer as to the issue of transaction value of the vessel, holding that the vessel was allowed for delivery at the time and place of importation at US $ 9,45,000/ - in terms of the addendum dated 25 -7 -1998 to the Memorandum of Agreement and, therefore, the transaction value was US $ 9,45,000/ - and not US $ 9,60,750/ - as per the original Memorandum of Agreement. It was also held that the excess duty collected was refundable to the importer.