2008 (8) TMI 271 - AT - Customs

Whether the valuation of Tug imported should be taken as on the date of importation or should be adopted as on the date of filing of bill of entry - Neither a copy of the bill of entry has been submitted nor there is any discussion about the exact date of filing B/E - Appellant cannot take advantage of reduction in value when the tug was under the control of the appellants and in use by themselves - Once the transaction value is available and there is no dispute that the appellants have remitted money on the basis of transaction value, the transaction value is to be the assessable value - As regards the rate of duty, what is relevant is the rate of duty as on the date of filing of B/E and not on the date of transaction value

Issues: Valuation of imported Tug

Issue Analysis:
The primary issue in this appeal before the Appellate Tribunal CESTAT Ahmedabad was the valuation of the Tug "Jyotsna" imported by the appellant. The key question was whether the valuation should be based on the date of importation (16th July, 2001) or the date of filing the bill of entry (28th November, 2002).

Facts Overview:
The Tug "Jyotsna" was converted from a foreign-going vessel to a coastal vessel, with the bill of entry filed on 5th February 2001. The sale of the vessel was finalized on 16th July 2001 for US $1.56 million. The appellant contended that the value should be based on the revaluation done on 28th November 2002, which found the international price to be US $1.2 million. The appellant argued that transaction value is not relevant for assessment under Section 14 of the Customs Act, and the value should be as on the date of filing the bill of entry.

Appellant's Argument:
The appellant's advocate argued that the transaction value finalized in July 2001 should not be considered for valuation, citing the Supreme Court's decision in Garden Silk Mills Ltd. v. UOI. They contended that prevailing market price should be considered, not the contract price. The delay in releasing the goods, according to the advocate, should not impact valuation.

Revenue's Argument:
The Revenue's representative argued that the date of filing the bill of entry is crucial for determining duty and tariff value. They relied on the Supreme Court's decision in M.S. Shoes East Ltd. v. C.C., New Delhi and a Tribunal decision in C.C., Bhavnagar v. Lucky Steel Industries to support their stance.

Tribunal's Decision:
The Tribunal noted the absence of clarity on the fate of the bill of entry filed in July 2001 and the penalty paid by the appellant. It was observed that the bill of entry filed in February 2001 was for ship stores, not the ship itself. The Tribunal upheld the Commissioner's decision that the assessable value should be the transaction value finalized in July 2001. The delay in filing the bill of entry was attributed to the appellant's fault, and the reduction in value claim was dismissed. The Tribunal emphasized that the transaction value, when available, should be the assessable value, and the rate of duty relevant is that on the date of filing the bill of entry.

Conclusion:
Ultimately, the Tribunal rejected the appeal, affirming that the assessable value should be based on the transaction value finalized in July 2001, and the rate of duty on the date of filing the bill of entry in November 2002 is applicable.

(Pronounced in the open Court)

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