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TMI Blog2010 (8) TMI 437X X X X Extracts X X X X X X X X Extracts X X X X ..... -2003. During the course of proceedings the importer also produced draft survey report No. ADM/BHV/03-04 dated 12-5-2003 prepared by Admiralty Marine Services, Bhavnagar and also the draft survey report No. MH/VM/IFS/0222/2002-03 dated 10-3-2003 prepared by Metcalfe and Hodgkinson Pvt. Limited, Visakhapatnam. While boarding the vessel, the Mast of the tug TOPAZ had produced a copy of operation manual Part-I WE dated January 1988 edition wherein the LDT of the vessel was mentioned at 7996 MT (7870 LT). The department sought to assess the vessel on the basis of LDT 7996 MT. The dispute was adjudicated by the ACC with the impugned order. The ACC allowed reduction of weight to the extent of 1670 MT from 7996 MT on the basis of some bills of ent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Stability book. The scrap removal during the stay of the vessel at Visakhapatanam in 2001-02 was on account of some modification done to the vessel. It was a modification, it is quite likely that some new parts or plates may have been used to replace the old and worn out parts and plates. No reliable account has ever been produced by the party except copies of bills of entry showing payment of duty on scrap 1670 MT. The ACC has already given the benefit to them by reducing the LDT by 1670MT. At the appellate stage also the party was sent a letter directing them to produce the Trim & Stability book and such other statutory documentation to support their contention. However, the appellant was not traceable. The only report of survey carried ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aster of the Tug TOPAZ. The LDT of the ship was 7996 MT when it was built in 1982. The ship was lying at Visakhapatnam since 1995. After its sale by ONGC to M/s. Annam Steels, Chennai, there was a major repair/modification of the said ship carried out at Visakhapatnam, wherein as per appellant the drilling equipments etc. installed on the said drill ship were removed and a total scrap of 1670 MT was cleared on payment of duty of Rs. 18,27,647/- in the year 2001-02 by M/s. Annam Steels, Chennai. This fact has been clearly reflected in Para (5) of the OIO No. SBY/13/2004-05 dated 10-9-2004, as having been confirmed by the Customs Officer of Visakhapatnam. Thereafter, M/s. Annam Steels, Chennai sold the said ship to M/s. Interface Shipping, Ch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... LDT. (vii) The customs duty is required to be paid at 15% of the transaction value and not on LDT. (viii) Revenue seeks levy of duty on LDT 7996 of ship at the time of its built in 1982 and referred to in Operational Manual Part-I WE Jan 1988 Edition, whereas law requires levy on 'transaction value' when it had LDT-5679 at the time of its import in 2003. Therefore, payment of customs duty under Customs Act, 1962 would be on goods which entered into India in May, 2003 i.e. on ship when it had LDT-5679 at time of import for breaking in May 2003. Similar issue is decided by reported ruling of the Hon'ble Supreme Court in M/s. J.M. Industries v. CCE - 1999 (106) E.L.T. 7 (S.C.). (ix) In case of M/s. JM Industries, the ship when bu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, Chennai, from the ship at Visakhapatnam, which is confirmed by Customs Officers at Visakhapatnam. 3. Learned advocate Shri P.M. Dave, appearing for the appellants, apart from reiterating the above submissions have drawn our attention to the fact that prior to the period in question, the assessment of the vessel under heading 89.08 was subject to ad-valorem rate of duty+1400 per LDT. It was in these circumstances that LDT of the vessel was considered to be an important aspect. In the subsequent tariff the duty leviable on import of the vessel is only on ad-valorem basis and LDT has no role to play. The enhancement of assessable value of the vessel based upon the LDT report is not justified. He also draws our attention to the Tribuna ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , we find that the LDT is not a relevant factor for arriving at the assessable value of the goods especially in respect of the vessel imported in the year 2003 when the tariff was changed and the duty was required to be paid only on the basis of assessable value. It may be having relevance for the period prior to in question when the duty payable was on the basis of ad valorem as also on the basis of LDT. It was in these circumstances that LDT gained importance for the period prior to 2003 arflwas required to be correctly arrived at, as duty was ad valorem + Rs. 1400/- per Light Displacement Tonnage. In the present case the duty is not relatable to LDT. The memo of agreement arrived at between the two parties also does not refer to any fact ..... X X X X Extracts X X X X X X X X Extracts X X X X
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