2015 (10) TMI 602 - AT - Customs

Reduction in value of goods in subsequent MoA Demand of differential duty Value as vessel was reduced as subsequent MoA, after conducting survey Adjudicating Authority assessed Bill of Entry on amount available at time of importation and confirmed demand of differential duty alongwith interest Commissioner (A) upheld adjudicating order and dismissed appeal filed by appellant Held that - value available at time of importation is US 9,54,044/- as per MoA therefore there is no reason available for reduction of price in subsequent MoA Hence, Adjudicating Authority rightly determined value of as per first MoA At time of import, price was available on basis of MoA of agreement and there is no material placed by appellant for reduction of price in subsequent MoA In view of discussions, no reason found to interfere with order of Commissioner(A) Decided against Assesse.

Summary

Issues:
1. Assessment of the value of an imported vessel based on different Memorandum of Agreements (MoA).
2. Determination of transaction value for customs assessment purposes.
3. Applicability of legal precedents regarding price reduction post-importation.

Analysis:
Issue 1: The case involved the assessment of the value of an imported vessel by Customs authorities based on two different MoAs. The initial MoA dated 26.4.2001 stated a consideration of US $ 9,54,044, while a subsequent MoA dated 3.5.2001 declared a reduced value of US $ 8,45,000. The Customs Officer initially boarded the vessel on 1.5.2001, and the Bill of Entry was filed on 8.5.2001. The dispute arose regarding which MoA should be considered for assessing the value of the vessel.

Issue 2: The appellant argued that the transaction value should be based on the MoA dated 3.5.2001, as it reflected the actual price paid for the vessel. The appellant relied on legal precedents, including a decision by the Hon'ble Supreme Court, emphasizing that the price actually paid or payable should be accepted as the transaction value. However, the Revenue contended that the value at the time of importation, as per the initial MoA, should be considered the transaction value for customs assessment purposes.

Issue 3: The Tribunal found that the transaction value for customs assessment should be the value declared at the time of importation, as per the initial MoA dated 26.4.2001. The Tribunal referred to a decision by a Larger Bench, which held that any reduction in price post-importation should not affect the assessable value unless due to specific circumstances like breach of contract terms. The Tribunal distinguished a legal precedent cited by the appellant, noting that in the present case, there was no valid reason provided for the price reduction in the subsequent MoA dated 3.5.2001. Consequently, the Tribunal upheld the Commissioner (Appeals) order and dismissed the appellant's appeal.

In conclusion, the Tribunal rejected the appeal, emphasizing that the transaction value for customs assessment should be based on the value declared at the time of importation, as per the initial MoA. The Tribunal highlighted the importance of considering the circumstances surrounding any price reduction post-importation and upheld the decision based on legal precedents and relevant case law.