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TMI Blog2010 (10) TMI 18X X X X Extracts X X X X X X X X Extracts X X X X ..... atutory provisions, the factum of actual payment of the price in terms of the addendum cannot be ignored while determining the value of the vessel under Section 14 of the Act. - 1908 OF 2006, 3 and 4 of 2005 - - - Dated:- 22-10-2010 - JUDGMENT D.K. JAIN, J.: I. A. Nos.3 and 4 of 2005 1. In the absence of any resistance, both the applications are allowed and the additional documents are taken on record. Applications stand disposed of. 2. Delay condoned. 3. This civil appeal under Section 130E of the Customs Act, 1962 (for short "the Act") is directed against order dated 2nd February 2005, passed by the Customs, Excise and Service Tax Appellate Tribunal (for short "the Tribunal"), whereby the appeal preferred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rveyors carried out inspection on 22nd November 1997, and submitted their report on 7th July 2000. The said report stated that "since the side tanks are meant for the receipt/carriage of sea water ballast for the ship's stability, the plating over the years undergo heavy corrosion (wastage.) Accordingly, the ship breaker is bound to suffer additional (illegible) loss on this account." 6. It seems that in light of the afore-quoted observations by the surveyors, fresh negotiations took place between the seller and the appellant, which resulted in a fresh agreement in the form of an addendum dated 8th December 1997 to the original MOA. In the said addendum, the price of the vessel was reduced to US $ 929388.60. The addendum mentioned that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the appellant has not produced any evidence to show that the vessel was not the same as was offered to them vide MoA dated 19.11.97. They have failed to produce any cogent reason for reduction in price from the MoA." 9. Aggrieved by the said order, the appellant carried the matter in further appeal to the Tribunal. Distinguishing the decision of the Tribunal in the case of Atam Manohar (supra), on which reliance was placed by the appellant, the Tribunal dismissed the appeal, holding thus: "In the present case there is no provision in the Memorandum of agreement for reduction of price on any account. We find that Tribunal in the case of Guru Ashish Ship Breakers (supra) held that in absence of any provision in the memorandum of agre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... OA for reduction in the agreed price, the revised price mentioned in the addendum is of no consequence for the purpose of Section 14 of the Act. 13. At the outset, we may note that the decision of the Tribunal in Atam Manohar (supra) was questioned by the revenue before this Court in Civil Appeal No.146 of 2004. While allowing the appeal and setting aside the order of the Tribunal primarily on the ground that the addendum was a self-serving document, the Court observed thus: "We may also point out that in this case we are basically concerned with the genuineness of the addendum to the MoA dated 13th April, 1999. If one looks at the said addendum, we find that the date on which the said addendum stood executed is not given. Further, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n by the Tribunal in the present case. 15. According to Section 14(1) of the Act, assessment of customs duty under the Customs Tariff Act, 1975 is to be made on the value of the goods imported. Unless the value of the goods is fixed under the sub-section (2) of Section 14, the value has to be determined under sub- section (1) of the said Section. The value, as per Section 14(1), as it stood prior to its amendment with effect from 10th October 2007, shall be deemed to be the price at which such or like goods are ordinarily sold, or offered for sale, for delivery at the time and place of importation - in the course of international trade. The word "ordinarily" is clarified in the Section itself, which describes an "ordinary" sale as one " ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is to be price mentioned in the original MOA or the reduced price indicated in the addendum. We are of the opinion that in light of the statutory provisions, the factum of actual payment of the price in terms of the addendum cannot be ignored while determining the value of the vessel under Section 14 of the Act. We may, however, hasten to add that in such a situation the genuineness and the necessity of reduction in the price are required to be scrutinised very carefully. 17.As afore-stated, in the instant case, the Tribunal has not examined the genuineness of the addendum, and has proceeded to reject the appeal of the appellant on the short ground that there was no provision for price variation in the original MOA. We may, however, ad ..... X X X X Extracts X X X X X X X X Extracts X X X X
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