2000 (6) TMI 597 - AT - Customs

Summary

Issues: Valuation of imported car - Diplomatic discount, Freight charges deduction, Currency conversion, Depreciation calculation

Diplomatic Discount:
The appellant contested the denial of a diplomatic discount of 10% on the imported car's assessable value. The appellant, a First Secretary in the High Commission of India at London, received a diplomatic discount from the supplier, Mercedes Benz. The Tribunal noted that the invoice clearly showed the diplomatic discount, and previous decisions supported the availability of such discounts to individuals in international services. Consequently, the Tribunal accepted the appellant's claim for the diplomatic discount.

Freight Charges Deduction:
The appellant argued for the deduction of freight charges incurred in transporting the car from Germany to London. However, the Tribunal rejected this claim, emphasizing that the focus should be on the value of the car purchased by the appellant, not the logistics of importing the car from Germany. Therefore, the claim for deducting freight charges was dismissed.

Currency Conversion:
The appellant raised concerns about the currency conversion for the car's value, as the invoice was in Deutsche Marks instead of Sterling Pounds. The appellant suggested that the value should have been quoted in the currency prevailing at the place of sale. However, the Tribunal disagreed, stating that the conversion should be based on the currency expressed in the document of sale. As the payments were made in multiple currencies, the department's approach to conversion was deemed correct, and the appellant's argument was rejected.

Depreciation Calculation:
Regarding depreciation, the appellant sought to extend the calculation beyond the date of shipment to include the period when the car was in transit until the filing of the bill of entry. The Tribunal clarified that depreciation is based on the use of the car, not just its availability. Depreciation applies from the purchase date until the car is no longer available for use, with a presumption that the owner utilizes the car during possession. Thus, the claim for extended depreciation was deemed illogical, and the original calculation was upheld.

In conclusion, the appeal was partially allowed, and the Tribunal directed the recalculation of the car's value and the duty payable based on the decisions outlined above.