Custom, Excise & Service Tax Tribunal
Yes vs Unknown on 1 February, 2008
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT AHMEDABAD COURT: II Appeal No. C/119/2004 Arising out of Order-in- Appeal No.374/2003/135-JMN/Cus/Commr(A)/ AHD, dt.24.10.03. Passed by: Commissioner of Customs (Appeals), Ahmedabad For approval and signature: Honble Mrs. Archana Wadhwa, Member (Judicial) Honble Mr. M. Veeraiyan, Member (Technical) 1 Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? : No 2 Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? : 3 Whether their Lordships wish to see the fair copy of the order? : Seen 4 Whether order is to be circulated to the Departmental authorities? : Yes Appellant/s Respondent/s
M/s Priyanka Steels Vs CC, Ahmedabad Represented by Represented by Shri Hardik Modh, Adv.
Shri K.J. Sanchis, JDR CORAM:
MRS. ARCHANA WADHWA, MEMBER (JUDICIAL) MR. M. VEERAIYAN, MEMBER (TECHNICAL) Date of Hearing:
04.02.08 Date of Decision:
12.02.08 ORDER No. /WZB/AHD/2008 Per: Mr. M. Veeraiyan, Member (Technical) This is an appeal against the order of the Commissioner of Customs (Appeals) No.374/2003/135-JMN/Cus/Commr(A)/AHD, dt.24.10.03.
2. Heard both sides.
3. The relevant facts, in brief, are as follows:
a) The appellants imported an old vessel M.V. EVANDROS K for breaking and as per the MOA dt.18.02.99, the agreed price was US $ 657,835.50 at the rate of US $ 108.50 per Long Ton (LDT).
b) By an Addendum, dt.15.3.99 to the MOA dt.18.2.99, the price was reduced to US $ 606,300 on the ground that the length of the vessel as recorded in the original MOA was 165.36 mtrs, whereas the actual length was 174.50 mtrs which would affect the thickness of the sheet and therefore the value.
c) The original authority held that the value of the vessel as declared in MOA dt.18.2.99 as the value to be adopted for the purpose of assessment under Section 14 of the Customs Act, 1962. The Commissioner of Customs (Appeals) has upheld the order of the original authority.
4. The learned advocate relies on the exceptional situation provided for in the decision of the Larger Bench of the Tribunal in case of CC, Bhavnagar Vs. Lucky Steel Industries and others. He submits that the length of the vessel was found to be different from that what was contracted, and hence the lower price as per the amended MOA should be accepted. He submits that the variation in price after the date of import is on account of the fact that the goods are not the ones which have been contracted for. The same shall be relevant for the purpose of determining assessable value under Customs Act as there has been serious breach of the terms of the contract which makes the contract void/voidable. The new/reduced price under the new/revised contract will be admissible as it is in conformity with the value as defined under Section 14 of the Customs Act read with the Valuation Rules.
5. The learned DR submits that variation is not significant or relevant. The variation in the length is because of the non-inclusion of the length of Bulbous bow which is a protruding bulb at the bow (or front) below the waterline. If the length of the vessel at the time of MOA is mentioned without taking into account the length of Bulbous, the same cannot make the specification of the vessel anything different.
6.1 We have carefully considered the submissions from both sides. The relevant portion of the Commissioner of Customs (Appeals)s findings on this aspect is as follows:
15. . The appellant has claimed that the length of the ship was different than what was contracted by the MOA dt.18.2.99. However, the adjudicating authoritys observation in Para 8 & 9 of the impugned order makes it very clear that though the overall length of this vessel (as per Lloyds Register) was 174.50 mtrs, it was only 165 mtrs between perpendiculars as per the American Bureau of Shipping and Germanischer Lloyd AG. As the MOA mentions the dimension as 165.36 mtrs, there is no discrepancy in the description of the vessel in the MOA and that which was informed to the appellant by the Surveyors. In Para 10 of the order, the adjudicating authority discards the authenticity of the certificate issued by M/s Corona Enterprises, Bhavnagar. I fully agree with the observation of the adjudicating authority in Para 8, 9 & 10 of the impugned order and hold that the appellant has not shown any discrepancy between the description of the vessel in the MOA and what was received by them after import. As there was no discrepancy, there was no ground for reduction of value. The vessel remain same at the time of import as was mentioned in the MOA. 6.2 We find that the MOA dt.18.2.99 not only specified the dimensions of the vessel, but also the make, weight and price per LDT. The agreement is also for as is where is basis. It has been accepted by the appellant that there is no variation in the LDT of the vessel. We are in agreement with the learned DR that it is basically the lengths of the same vessel which were measured by two different methods. We have not been shown by the appellant that the overall LDT has changed, or that the dimension of the waste sheet recovered by breaking the ship has been reduced warranting change in price of the vessel. The exception provided in the case of decision of the Larger Bench of the Tribunal in case of Lucky Steel Industries, cannot be applied to this case. The decision of the Commissioner (appeals) in holding that the price mentioned in the original MOA is the value to be adopted for assessment is in order.
7. In the light of this, the appeal is rejected.
(Pronounced in Court on 12.02.08) (Archana Wadhwa) (M. Veeraiyan) Member (Judicial) Member (Technical) cbb 4