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TMI Blog2006 (2) TMI 167X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 130(E) of the Customs Act, 1962 (for short "the Act") against the Final Order No. C-I/II/WZB/2000, dated 2-1-2001 in Appeal No. C/533-V/99-Bom passed by the Customs, Excise and Gold (Control) Appellate Tribunal, West Zonal Bench at Mumbai (hereinafter referred to as "the Tribunal") whereby the Tribunal reversed the order-in-appeal passed by the Commissioner of Central Excise on 8-3-1999 and held that the appellant could not be granted abatement of the duty. 2.Briefly stated the facts of the case are :- M/s. Priya Blue Industries Pvt. Ltd., Plot No. V-1, Sosiya (hereinafter referred to as "the importer") hold import export code number and also Central Excise Registration. It imported vessel MV VLOO ARUN under OGL for the purpose of breaking. The vessel weighing 40,017 LDT had been purchased for US$ 68,49,839.00 i.e. @ US$ 167 per Long Ton. Importer got a letter of Credit bearing No. 58 IDC 21.97 dated 12-8-1997 opened in favour of Ruby Enterprise Inc., 2018, Antwerp, Belgium, the foreign sellers for US$ 68,49,839.00 which amount was remitted by the Vysya Bank Ltd., Mumbai to the beneficiaries on 12-8-1997 itself. The importer had thereafter sought and been granted permission ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .Thus, the facts which emerge from the above are : Importer entered into an agreement of memorandum with the foreign seller on 2-6-1997. On 4-6-1997 the importer took physical delivery of the ship. On 24-6-1997 the importer requested time for filing the Bill of Entry. On 12-8-1997 LC was opened and on the same day the amount was remitted to the foreign seller. Thereafter importer sought and was given permission for beaching the vessel. The agreement of sale between the importer and the appellant was executed on 11-9-1997. The appellant presented the Bill of Entry on 12-9-1997 and the price was stated to be Rs. 12,01,00,000/-. On 9-6-1997 itself the vessel had started drifting. The importer transferred the title to the buyer in pursuance to the memorandum of understanding and the agreement of sale entered into between them on 26-12-1997 by executing the bill of sale in favour of the appellant on "as is where is" basis for a consideration of Rs. 12,01,00,000/- i.e. after the passing of the assessment order dated 23-12-1997. 6.The Assessing Authority in his assessment order dated 23-12-1997 held that the value declared by the appellant was not the price in the course of internationa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the unloading of the goods in India; or (b) that any imported goods, other than warehoused goods, had been damaged at any time after the unloading thereof in India but before their examination under section 17, on account of any accident not due to any willful act, negligence or default of the importer, his employee or agent; or (c) that any warehoused goods had been damaged at any time before clearance for home consumption on account of any accident not due to any willful act, negligence or default of the owner, his employee or agent, such goods shall be chargeable to duty in accordance with the provisions of sub-section (2). (2) The duty to be charged on the goods referred to in sub-section (1) shall bear the same proportion to the duty chargeable on the goods before the damage or deterioration which the value of the damaged or deteriorated goods bears to the value of the goods before the damage or deterioration. (3) For the purposes of this section, the value of damaged or deteriorated goods may be ascertained by either of the following methods at the option of the owner :- (a) the value of such goods may be ascertained by the proper officer, o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xtending into the sea up to the limit of contiguous zone of India under section 5 of the Territorial Waters, Continental Shelf, Exclusive Economic Zone and other Maritime Zones Act, 1976 (80 of 1976) and includes any bay, gulf, harbour, creek or tidal river; 12.Section 14, which is the relevant provision for valuing the vessel sold by the importer, reads :- "Sec. 14 - Valuation of goods for purpose of assessment. - (1) For the purposes of the Customs Tariff Act, 1975 (51 of 1975) or any other law for the time being in force where under a duty of customs is chargeable on any goods by reference to their value, the value of such goods 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 or exportation, as the case may be, in the course of international trade, where the seller and the buyer have no interest in the business of each other and the price is the sole consideration [Emphasis supplied]for the sale or offer for sale." 13.The price of the vessel in the course of international trade was the price [US$ 68,49,839.00] paid by the importer to the Ruby Enterprises Inc., Belgium in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... laimed before the Appellate Authority. No such case had been made out before the Assessing Authority before the goods were actually cleared. Adoption of two different values for the same goods for the purpose of charging duty of customs under Section 12 of the Act and Section 3 of the Customs Tariff Act, 1975 is not only unprecedented but also patently illegal. 17.The Memorandum of Understanding was executed between the importer and the appellant on 10-9-1997 which provided : "The sellers shall deliver vessel to buyers within 1 (one) day i.e. upon receipt of full purchase price and buyer shall accept the vessel "as is where is" at Sosiya". 18.The bill of sale executed by the importer in pursuance to the MOU entered between the parties on 10-9-1997 and the agreement of sale dated 11-9-1997 on 26-12-1997 whereby the importer transferred the title of the vessel to the appellant purely on "as is where is" basis for a consideration of Rs. 12,01,00,000/-. The said bill of sale stated as follows :- "TO HAVE AND TO HOLD the said vessel and appurtenances there into belonging upto the buyer, its successors and assign for ever. Seller hereby transfers title to vessel to buyer outright ..... X X X X Extracts X X X X X X X X Extracts X X X X
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