2024 (5) TMI 209 - AT - Customs

Valuation - Assessable value of import vessel - Valuation of revised (reduced) price - Duty demand - HELD THAT - We find that in the instant case the price was declared on the basis of the first MOA entered between the appellant and the cash buyer wherein it was believed that the LDT of the ship is 10386 MT. However at the time of import it was found that the LDT of the ship was 10, 200 MT. Thus there was a short fall of approximately 186 MT in the LDT as compared to the originally agreed LDT. Consequently the price was revised by entering into fresh MOA. The facts regarding the original and fresh MOAs were explained by the learned counsel as already recorded in his submission. We do not find any merit in the impugned order rejecting the value based on the revised MOAs when the LDT declared in original MOA was found to be different from the actual LDT. In these circumstances ratio of decisions in Chaudhary Ship Breakers) 2023 (6) TMI 1200 - CESTAT AHMEDABAD squarely apply. Consequently demand is set aside and appeal allowed.

Summary

Issues Involved:
- Rejection of declared assessable value for import of ship based on discrepancy in LDT.

Summary:
The appeal was filed against the rejection of the declared assessable value for the import of a ship due to a discrepancy in the Light Displacement Tonnage (LDT) as per the original Memorandum of Agreement (MOA) and the actual LDT found during inspection. The appellant, a ship breaker, had initially entered into an MOA with the cash seller for the purchase of a ship with declared LDT of 10,386 MT, but upon inspection, the actual LDT was found to be 10,200 MT. Subsequently, revised MOAs were executed to reflect the correct LDT and price. The appellant filed the bill of entry based on the revised value, but a show cause notice was issued proposing a higher assessment without considering the LDT variance. The Tribunal considered legal precedents, including the case of Chaudhary Ship Breakers, and Hussain Sheth Ispat, where it was established that the transaction value based on the revised MOA should be accepted for customs duty payment under Section 14 of the Customs Act if the goods differ from the original agreement. The Tribunal found that the revised price based on the corrected LDT should be considered for duty assessment, and the appeal was allowed, setting aside the demand.

In conclusion, the Tribunal ruled in favor of the appellant, emphasizing that the revised MOA value should be accepted when the actual LDT differed from the originally declared LDT, in line with legal precedents and statutory provisions. The impugned order rejecting the revised MOA value was set aside, and the appeal was allowed.