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TMI Blog2023 (5) TMI 51X X X X Extracts X X X X X X X X Extracts X X X X ..... the said decision it is not applicable to the facts of this case. It is seen that the acceptance of original declared price is dependent on the fact that there is no variation in the nature of goods which had been contracted. In the instant case, it is seen that the LDT of the goods appearing in the original MoA is different from the LDT mentioned in the later MoA in these circumstances, the decision of Tribunal in the case of Lucky Steel Industries [ 2006 (6) TMI 246 - CESTAT, MUMBAI ] may not be applicable. Similarly in the case of MALWI SHIP BREAKING VERSUS COMMISSIONER OF CUSTOMS, JAMNAGAR [ 2007 (11) TMI 530 - CESTAT, AHMEDABAD] relied on by the Revenue, it has been clearly held that there was no discrepancy in the list of items agreed upon and the items actually reported as seen from the surveyor report. The fact in the instant case is different and therefore, the said decision also has no applicability in the instant case. It is found that the genuineness of the MoA dated 22.11.2012 has not been doubted. It is also noted that the LDT mentioned in the MoA dated 05.11.2012 between Ace Exim Pvt. Ltd. and Alang Auto Gen. Engg. Pvt. Ltd. was not found to be correct wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... im Private Limited and the earlier buyer namely Alang Auto and General Engineering Company Private Limited of USD 17,28,000/-. The provisional assessment was finalized at transaction value of USD 17,28,000/- mentioned in the MoA dated 05.11.2012 rejecting the value declared by the appellant of USD 15,90,930/- agreed on the MoA between the appellant and the Ace Exim Private Limited vide MoA dated 22.11.2012. The appeal filed by the appellant before Commissioner (Appeal) was rejected. Aggrieved by the said order, the appellants are in appeal before Tribunal. 2.4 Learned Counsel relied on the decision of Hon ble Apex court in case of Chaudhary Ship Breakers 2010 (289) ELT 161 (SC) in which it has been held that the factum of actual payment of price in terms of agreement between parties cannot be ignored while determining the value of vessel under Section 14 of the Act. Reliance was placed on the decision of Tribunal in the case of Jai Bharat Steel Industries 2005 (192) ELT 792 which was upheld by the Hon ble Apex Court as reported in 2016 (340) ELT A 138 (SC). Learned Counsel argued that sine the transaction value is available under Rule 4(1) of the Customs Valuation Rules then the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is bought on as is where is basis. If that be the case, we do not know on what basis the value of the vessel stood reduced from US $ 9,70,960.23 to US $ 8,70,960.23. Lastly, it is stated on record that one of the items was not in a working condition and by way of damages, the price stood reduced. It is not so stated in the addendum. If it is the case of damages, then, surely it would have been so stated in the addendum. 14. It is manifest that the Court expressed the view that where the price of the vessel had been reduced by way of an addendum to the original agreement, the acceptance of the revised price would depend on the genuineness of the said addendum. In other words, the Court laid greater emphasis on the genuineness or otherwise of the addendum and not on the factum of absence of a provision in the original agreement for reduction of price for the reasons stated in the addendum, as held in the case of Guru Ashish Ship Breakers (supra), relied upon 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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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, add that the Commissioner (Appeals) did examine the cogency of the reasons for price reduction though he was not convinced to accept the same. From the above it is quite apparent that so long as the transaction value is real and there are reasons for any change in the transaction value and the MoA is genuine then the price declared therein should be accepted. 5. In the case of Jai Bharat Steel Industries reported in 2005 (192) ELT 792 relied upon by the learned Counsel in para 13 to 15 following have been observed: 13 . Memorandum of Agreement in all these cases reflected the terms of the contract. The addendums by which the stipulation of the reduced price was substituted in the Memorandum of Agreement briefly recorded the reasons for such reduction. The reduction in price was done, as observed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oods remain at the seller s risk until the property therein is transferred to the buyer, but when the property therein is transferred to the buyer, the goods are at the buyer s risk whether delivery has been made or not. They are also in consonance with Section 32 which provides that, unless otherwise agreed, delivery of the goods and payment of the price are concurrent conditions. Under Section 42 of the said Act, the buyer is deemed to have accepted the goods when he intimates to the seller that he has accepted them, or when the goods have been delivered to him and he does any act in relation to them which is inconsistent with the ownership of the seller, or when, after the lapse of a reasonable time, he retains the goods without intimating to the seller that he has rejected them. A buyer has a right to examine the goods under Section 40 where he has not previously examined them and he is not deemed to have accepted them unless and until he had a reasonable opportunity of examining them for the purpose of ascertaining whether they are in conformity with the contract. If a wrong quantity of goods is delivered and the buyer who had option to reject them, accepts the goods so delive ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs and buyers for the reasons mentioned in the addendums. In some cases, the purchase price was reduced because differences and discrepancies were noticed in the vessel which was described in the MOA. 15 . The fact that the vessels were sold on as is where is basis did not preclude the parties from varying the price originally stipulated by mutual agreements. It appears that before the delivery was taken discrepancies and excess removals etc. were noticed and on negotiation the prices were reduced by mutual agreement, as reflected in the addendums executed by both the parties bringing about the alterations in the original contract while retaining all other terms and conditions thereof. It was before taking of the delivery that the buyers could have exercised their right to reject the goods if they were not as per the specifications stipulated in the memorandum of agreement. The as is where is basis clause did not preclude them from examining the vessel to find out whether they were really being delivered the ship on as is where is basis described in the MOA. The particulars which were given about the vessel in the MOA, were required to be verified notwithstanding clause ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hese circumstances, the decision of Tribunal in the case of Lucky Steel Industries may not be applicable. 7. Similarly in the case of Malvi Ship Braking (supra) relied on by the Revenue, it has been clearly held that there was no discrepancy in the list of items agreed upon and the items actually reported as seen from the surveyor report. The fact in the instant case is different and therefore, the said decision also has no applicability in the instant case. 8. In the instant case, we find that the genuineness of the MoA dated 22.11.2012 has not been doubted. It is also noted that the LDT mentioned in the MoA dated 05.11.2012 between Ace Exim Pvt. Ltd. and Alang Auto Gen. Engg. Pvt. Ltd. was not found to be correct when the surveyor boarded vessel. The MoA dated 22.11.2012 contains a different a LDT which is lower by 507 MT. In these circumstances, we hold that the decision of Hon ble Apex Court in the case of Chaudhary Ship Breakers (supra) will apply. Since the new MoA dated 22.11.2012 has not been found to be incorrect or fabricated and there was variation in the specification of the goods imported, the Revenue cannot reject the price mentioned in the MoA dated 22.11.201 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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