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Issues involved: Appeal filed by Revenue against Commissioner (Appeals) order allowing importer's appeal on vessel valuation.
Summary: 1. The respondent purchased an old vessel M.V. Kupa for breaking at Ship Breaking Yard, Alang, under a Memorandum of Agreement. The vessel was imported into India, and subsequent amendments were made to the agreement reducing the purchase price. The importer claimed a reduced value for assessment, but the Original Authority assessed the value at the original price based on precedents from Calcutta High Court. 2. The Appellate Commissioner dismissed the appeal on bunkers and provisions but allowed the appeal on the vessel's transaction value, accepting the reduced price as per the amended agreement. The excess duty collected was deemed refundable to the importer. 3. A Larger Bench decision stated that any price reduction agreed upon before import is relevant for assessment, but post-import variations are not unless due to specific reasons like goods not matching the contract. In this case, as the vessel was sold "AS IS WHERE IS BASIS" and no serious breach occurred, the post-import price reduction was not justified. The Commissioner (Appeals) erred in accepting the reduced value without considering the original agreement price as the transaction value in international trade. 4. The decision of the Larger Bench in a similar case was found applicable, and the post-import reduction in the agreement's value was not considered valid. The Commissioner (Appeals) order reducing the transaction value was set aside, restoring the Original Authority's assessment of the vessel at the original price. The appeal was allowed accordingly.
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