Judgment:
1. The appellant imported a second hand Toyota Corolla Sedan LE-4-Dr 1985, model CC1587 car on 17-6-1986 against CCP No. 3079296 dated 19-9-1989 and filed Bill of Entry No. 109885 dated 7-10-1989 for its clearance. Since the car was not listed in the 1985 World Car Catalogue, the Asstt. Collector based its assessment on the ex-works price of 1985 Model Toyota Corolla SR-4-Dr 1600 CC car which as per the 1985 World Car Catalogue, was Japanese Yen 12,08,000. After allowing a discount of 46% on account of usage and further ad hoc deduction of Rs. 500/-, the FOB value of the car was worked out at Rs. 64,924.42. After adding Rs. 11,374.42 on account of freight and 1.125% of the FOB value as insurance and 0.75% landing charges on the total assessable value of Rs. 77,157.20 the duty chargeable was worked out as Rs. 1,79,697.20.
The value of air-conditioner and radio cassette player fitted in the car was declared as Rs. 6,000/- and Rs. 1,000/- respectively, and they were assessed on merits. On account of shortfall of Rs.7,000/- in the CCP a redemption fine of Rs. 2,000/- was imposed by the Assistant Collector. The appeal filed by the appellant challenging the assessable value arrived at by the Asstt. Collector and the air-conditioner and radio cassette player not having been taken as standard equipment of the car was rejected by the Collector (Appeals).
2. On behalf of the appellant we heard the learned Consultant Shri N.C.Sogani. He contended that price of Toyota Corolla SR-4-DR 1600 CC on which the assessable value of the imported car was based was a superior model with higher engine capacity. In support of his claim he referred to the N.A.D.A. used car catalogue for October, 1985 which lists the price of well-known models of cars available in U.S.A. and pointed out that the price of 1985 Toyota Corolla SR-4-Dr 1600 CC car was about US $ 500, more than the price of 1985 Toyota Corolla LE-4-Dr. He claimed that the air-conditioner and radio cassette player being standard equipment of the car the price paid was inclusive in the price of these items. He added that in arriving at the assessable value the Assistant Collector ought to have taken freight from Japan to India since the car was of Japanese origin and not from U.S.A. to India. On this ground Shri Sogani contended that the assessable value arrived at by the Assistant Collector was unreasonable, and there was no justification for imposition of any redemption fine.
3. On behalf of the department the learned JDR Shri Satish Kumar claimed that the assessable value arrived at on the basis of the price of a similar car in the World Car Catalogue was reasonable. He contended that the air-conditioner and radio cassette player being accessories were correctly assessed on merits.
4. We have gone through the records of the case and considered the arguments advanced by both sides. We find that there is sufficient force in the appellant's contention that valuation of the imported Toyota Corolla LE-4-Dr 1587 CC car on the basis of the price of Toyota Corolla SR-4-Dr 1600 CC car in the World Car Catalogue, 1985 was unreasonable. It is seen from the N.A.D.A. official car guide for October, 1989 filed by the appellants, that as compared to price of Toyota Corolla LE-4-Dr 1587 CC, Toyota Corolla 1985 SR-4-Dr 1600 CC was a superior car and price differential between the two models was about US $ 500/-. The value of motor vehicle imported by individuals is to be based on the reported price of the particular car in well-known international automobile journals such as World Car Catalogue. However, if the price of any particular vehicle is not reported and valuation is determined on the basis of the price of a similar car it would be necessary to make suitable adjustment in the price keeping in view the relative engine capacity and other relevant factors. We are, therefore, of the view that it would be reasonable to determine the ex-works price of the imported Toyota 1985 Corolla LE-4-Dr 1587 CC car by giving an allowance of US $ 500 on the reported ex-works price of Toyota Corolla 1985 SR-4-Dr 1600 CC model which was available in the World Car Catalogue, 1985.
5. We agree with the appellant that in arriving at the assessable value of the imported car the freight charges that would have been incurred in shipping a similar car from the country of origin namely, Japan ought to have been taken into account. However, the claim that the air-conditioner and the radio cassette player being standard accessories the ex-works price of the car should be deemed as inclusive of the price of these items is not correct since the automobile Red Book official used car catalogue which has also been relied upon by the appellant shows that these accessories were being charged separately and the ex-works price of the vehicle was not inclusive of the price of these items.
6. We also find that the shortfall in the face value of the CCP being nominal there was no justification for imposition of any fine in lieu of confiscation. We, therefore, set aside the order passed by the Assistant Collector imposing a fine of Rs. 2,000/- in lieu of confiscation.
7. In view of the foregoing, the appeal is allowed by remand to the Assistant Collector who shall revise the duty on the basis indicated in this order and grant consequential relief to the appellant.