2010 (12) TMI 120 - AT - Customs

Duty on pilfered goods - Tribunal observed that no material change in the goods have been found at Alang between the first importer and the second importer - It was also observed that the reason for the value difference was not explained - In this case the original buyer withdrew from the sale and thereafter, the appellant entered into picture - The transaction value was genuine and the reduction was due to non availability of certain items and therefore the appeal has to be allowed and refund claim also has to be allowed - The Commissioner has considered the issue logically, cogently and has come to the correct conclusion by discussing all the aspects of the matter - Consequently the claim for reduction of value fails and therefore the impugned orders have to be upheld

Summary

Issues:
1. Eligibility for refund and valuation of the vessel.
2. Discrepancy in vessel contents and price reduction.
3. Applicability of previous legal judgments.
4. Justifiability of price reduction and refund claim.

Analysis:

Issue 1: Eligibility for refund and valuation of the vessel
The case involved a vessel, MV Hatan, which was first bought by Haryana Ship Breakers Ltd. and then purchased by the appellant as a second buyer. The appellant paid duty as per the original price under protest and filed a refund claim. The matter reached the Tribunal, which remanded it to the Commissioner (Appeals) for a fresh decision on valuation and the refund claim.

Issue 2: Discrepancy in vessel contents and price reduction
The Tribunal observed that there was no material change in the ship fitments missing from the ship between the first and second buyers. It was noted that if goods were found missing from the ship, the provisions of the Customs Act would apply. The Commissioner (Appeals) confirmed the original value, rejecting the claim for a reduction based on missing items found after the sale.

Issue 3: Applicability of previous legal judgments
The appellant argued that a previous Supreme Court judgment did not apply in this case as the seller was foreign and the buyer was Indian. Additionally, the appellant claimed that a new agreement was made with the foreign seller, justifying the reduction in price due to missing items.

Issue 4: Justifiability of price reduction and refund claim
The appellant contended that the reduction in price was due to non-availability of certain items, supported by surveys and expert opinions. However, the Tribunal found that the appellant failed to prove the existence of extra removals from the vessel justifying the price reduction. The Commissioner's decision to uphold the original value and reject the refund claim was deemed logical and in accordance with the law.

In conclusion, the Tribunal upheld the Commissioner's decision, rejecting the appeals as unsustainable due to the lack of evidence supporting the price reduction claim. The judgment emphasized the importance of proving discrepancies in vessel contents to justify any reduction in value or refund claim.