MRS. SIMA KHATIB Vs. CC

JUDGEMENT

(1.) HEARD both sides. The appellant had purchased a Mercedes Benz Car of Model 190D from M/s Gargash Enterprises, Dubai at a price of Dirhams 83.100/ - on 23/06/1993. Subsequently, she imported the said car to India in the year 1996 and filed a Bill of Entry bearing No. 11473 dt. 29/03/1996 for its clearance. After first examination, the customs assessed the value of the car as DM 42,545/ - and the value of other optional items such as metallic paint, central locking system, tinted glass, air -conditioner, Audio system etc. as DM 11/040/ - on the basis of the price list of Mercedes Benz, Germany released on 2nd January, 1993. Accordingly, the car inclusive of the optional items was assessed as Rs. 9,07,300/ - and the fair value of the car cover was taken as Rs. 700/ - and the appellant was asked to pay custom duty of Rs. 10,00,507/ - in foreign currency and clear the car.

(2.) THE appellant claimed assessment on a lower price of DM 32,964/ - (F.O.B.) stating that the purchase price of the car was only Dirhams 83,100/ - because this model of car was discontinued from 1993. She also submitted a copy of a letter from Mercedez Benz to M/s Gargash Enterprises, Dubai confirming that the value of the above car was DM 32,964/ -. The order in original passed by the Additional Commissioner did not accept the plea of the appellant for assessment at a lower price. Subsequent appeal to the Commissioner (Appeals) has also been turned down. The appellant had inter alia submitted to the Commissioner (Appeals) that either the purchase price be accepted as the basis of valuation or alternatively, trade discount of 15% may be allowed from the manufacturer's price list. In the impugned order the Commissioner (Appeals) has held that since the list price of the manufacturer has been adopted, which is the net price, the claim for 15% discount has been correctly rejected as there was no material to show that the manufacturer was offering trade discount on the list price.

(3.) AFTER hearing both sides and perusal of case records including the cited case 'laws, we are of the opinion that the price at which the appellant has purchased the impugned car in the year 1993 cannot be considered as the 'transaction value' nor can the valuation of the impugned car be done by the first method of valuation i.e. Transaction Value method. Transaction value' has been defined in Rule 4 of the Customs Valuation (Determination of Price of Imported Goods) Rules, 1988 to be "the price actually paid or payable for the goods when sold for export to India adjusted in accordance with the provisions of Rule 9." The definition of the 'transaction value' includes a significant phrase -"when sold for export to India". In the instant case, the impugned car was admittedly sold to the appellant in the year 1993 at Dubai as evident from the Invoice dtd. 23/06/1993 submitted by the appellant herself. Subsequently, the appellant has used the car abroad and only in the year 1996, she has exported the same to India. It is, therefore, clear that the impugned car was not 'sold for export to India' in the year 1993 and the price which was paid for the car cannot, therefore, be deemed to be the 'transaction value' of the car cannot, therefore, be deemed to be the 'transaction value' of the car which was used abroad subsequent to its purchase during the period from 1993 to 1996, and which was only subsequently imported to India only in the year 1996. The impugned invoice represents the price paid for a local sale at Dubai and its does not represent the price for any sale for export. Moreover, the appellant herself has imported the car which was in her use and such personal export from Dubai to India by the appellant does not involve any sale. In other words, the actual export and import of the used car in this case is not accompanied by a sale transaction. In view of the foregoing, the invoice price which the appellant has paid for a local sale at Dubai in the year 1993 does not meet the definition of 'transaction value' in Rule 4 for the purpose of assessment of the car imported in the year 1996 after its intervening use abroad. Consequently, since there is no transaction value available for import, the first method of valuation i.e. the Transaction value method cannot be applied in this case. In his order, the original authority has, therefore, rightly held that the transaction is not between the importer in India and the seller in another country and hence it was not possible to arrive at the assessable value applying the Transaction Value method.