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2010 (8) TMI 437 - AT - CustomsValuation - Assessable value of import vessel - Light Displacement Tonnage - The appellants imported a vessel MV Sagar Prabhat on 12-5-2003 for breaking purpose - the value of the ship between seller and buyer, has not been arrived at on the basis of LDT. It is a lump-sum quantum required to be paid by the buyer to the seller for the ship in question and the price not based on per unit of LDT - There is no other evidence on record to show any extra payment to the seller or flow back of money - The payments have been made by cheque through letter of credit - whether LDT declared by the appellant was correct or not, find that the LDT is not a relevant factor for arriving at the assessable value of the goods especially in respect of the vessel imported in the year 2003 when the tariff was changed and the duty was required to be paid only on the basis of assessable value - Hence, the appeals filed by the appellants are allowed.
Issues:
1. Dispute over the assessment of imported vessel based on Light Displacement Tonnage (LDT). 2. Applicability of transaction value under Section 14 of the Customs Act and Rule 4 of the Customs Valuation Rules. 3. Relevance of LDT in assessing the value of the vessel post-2003 tariff changes. 4. Dispute regarding the importance of LDT in determining the assessable value of goods. 5. Validity of the Memo of Agreement in determining the transaction value of the vessel. Analysis: 1. The dispute revolved around the assessment of an imported vessel based on its Light Displacement Tonnage (LDT). The appellant imported the vessel for breaking purposes, declaring the LDT as 5679 MT, while the department sought to assess it at 7996 MT. The lower authorities upheld the assessment based on the original manual's LDT of 7996 MT, reducing it by 1670 MT due to scrap removal during a prior modification carried out at Visakhapatnam. 2. The appellant argued that the transaction value should be adopted as per Section 14 of the Customs Act and Rule 4 of the Customs Valuation Rules. They contended that the price paid through a bank LC for the vessel should determine the assessable value, and there was no evidence to link the price to the LDT of the ship. 3. Post-2003 tariff changes, the duty payable on imported vessels was based on ad-valorem rates, rendering the LDT irrelevant in determining the assessable value. The appellant emphasized that the LDT was not a relevant factor in assessing the value of goods in 2003 when duty was based solely on the assessable value. 4. The Tribunal found that the LDT was not crucial in determining the assessable value of the vessel imported in 2003, as the price was not based on the LDT but on a lump-sum amount paid by the buyer to the seller. The payment was made through a letter of credit, and there was no evidence of any additional payments linked to the LDT. 5. The Memo of Agreement between the seller and buyer was considered reliable in determining the transaction value of the vessel. The Tribunal concluded that the LDT was not a relevant factor in assessing the value of the vessel, and the appeals filed by the appellants were allowed, rejecting the contentions of the lower authorities and disposing of the Revenue's cross-objections. This detailed analysis of the judgment highlights the key issues, arguments presented, and the Tribunal's findings regarding the assessment of the imported vessel based on LDT and transaction value under the Customs Act.
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