2018 (4) TMI 1436 - AT - Customs

Valuation - import of used Hummer car under Transfer of Residence Rules - deduction of depreciation from the value - The appellant s contention is that trade discount allowance for VAT refund and for inland haulage charges should also be deducted from the price - Held that - On reading of the Circular F.N. 3/23/62-Cus-VI dt. 21.01.1964 it is found that the trade discount is meant for the motor cars which are directly imported from a foreign country by passengers diplomats and foreign nations. It is evident that it is meant for direct shipment of new cars - As the appellant in this case has brought a used car the Board Circular of 1964 is not applicable for such cars. VAT refund in the foreign country - Held that - the plea is not acceptable as maximum allowable depreciation of 70% has been given which is as per the Board Circular of 1993 - Besides the VAT refund for a car more than 7 years old does not make sense. Miscellaneous charges - Held that - those charges are meant for cost of transportation loading/unloading and handling charges upto importation. Inland Haulage Charges within India of about 45000/- - Held that - deduction not tenable because these charges have not been included in the charge. Dealer s margin - Held that - the question of considering such margin can be there for a new car and not for a used car. Deduction for parts/accessories fitted by dealer - Held that - the vehicle was fitted with these and assessment has rightly done on basis of invoice submitted by the appellant declaring the price of US 52735.43 including these parts/accessories. Appeal dismissed - decided against appellant.

Summary

Issues:
Customs valuation - Assessment of used vehicle under Transfer of Residence Rules - Deduction of trade discount, VAT refund, and inland haulage charges - Inclusion of miscellaneous charges - Consideration of dealer's margin and parts/accessories in valuation.

Analysis:
The appellant imported a used Hummer car under Transfer of Residence Rules without a purchase invoice but with a loan document. The initial assessment valued the car at US$ 16702.20, including depreciation and miscellaneous charges, resulting in a duty of &8377; 24,85,202/-. On appeal, the Commissioner (Appeals) set aside the order and assessed the car at US$ 15820, considering other charges. The appellant argued for the deduction of trade discount, VAT refund, and inland haulage charges, which were not excluded from the price.

The appellant failed to produce the purchase invoice initially, but later presented it during the appeal. The first appellate authority allowed a 70% depreciation based on the invoice. The appellant's request for deductions, including trade discount, VAT refund, and inland haulage charges, was rejected. The Board Circular of 1964 on trade discount was deemed inapplicable to used cars. The plea for VAT refund deduction was dismissed due to the already allowed 70% depreciation. The miscellaneous charges were justified as pre-importation costs, and the argument for inland haulage charges deduction was rejected.

The appellant's claim for considering the dealer's margin and parts/accessories in valuation was addressed. The valuation was upheld based on the invoice submitted by the appellant, declaring the price of US$ 52735.43, inclusive of parts/accessories. The Tribunal found no error in the Commissioner (Appeals) order and dismissed the appellant's appeal, affirming the valuation methodology and deductions made in the assessment.

In conclusion, the Tribunal upheld the Commissioner (Appeals) decision, emphasizing the correct application of valuation principles and deductions. The appeal was dismissed, and the valuation of the used Hummer car under Transfer of Residence Rules was confirmed based on the invoice price with included accessories and charges, as determined by the appellate authority.