1994 (12) TMI 234 - AT - Customs

Summary

Issues:
1. Dispute over the value of an imported car.
2. Determination of depreciation and trade discount.
3. Inclusion of actual freight charges in the assessable value.

Analysis:
The dispute in this case revolves around the value assessment of an imported car, specifically a M/Benz 190-1984 model. The Assistant Collector initially determined the car's value based on the manufacturer's invoice without allowing for depreciation, citing it as a brand new car. However, in the appeal process, the Collector (Appeals) acknowledged that the car had incurred damage charges and was not entirely new, allowing for some depreciation but restricting it to two quarters at a rate of 4%. The appellant contested this decision, arguing that the car was purchased a year prior to importation, making it eligible for full depreciation for the entire year. Additionally, the appellant claimed a 15% trade discount, citing previous tribunal decisions supporting this entitlement.

During the proceedings, the appellant's representative highlighted discrepancies in the inclusion of freight charges in the assessable value. The appellant argued that the actual freight charges incurred were 1478 DM, but the department erroneously added a notional value of 4450 DM. The Revenue representative did not contest the trade discount or depreciation allowance but supported the inclusion of correct freight charges, emphasizing that the charges on the invoice were at a concessional rate, as noted by the Collector (Appeals).

Upon reviewing the arguments, the Tribunal concluded that imported goods must be assessed in the condition they were imported. It was established that the car was purchased a year before importation and was damaged during the process. The Tribunal agreed with the appellant's assertion that full depreciation for the entire year should be allowed, along with the entitled 15% trade discount. Referring to Section 14 of the Customs Act, which deems the value of goods based on their ordinary selling price, the Tribunal upheld the inclusion of actual freight charges in the assessable value, rejecting the addition of notional values without evidence of special concessions. Consequently, the Tribunal allowed the appeal, directing a reassessment of the car's value after accounting for the trade discount, full depreciation, and actual freight charges incurred by the appellant.