Judgment:
1. Appellant, while she was abroad purchased a second hand Volvo Car (manufactured in 1985) and imported it in the first week of June 1988.
The invoice price was 250. The Assistant Collector was not prepared to accept the invoice price as the genuine price. Show cause notice was waived. The appellant did not produce the manufacturer's price list.
The Assistant Collector had the world car catalogue with him. According to the world car catalogue the particular model car was priced 5971.00 (inclusive VAT and Car Tax). The Assistant Collector adopted this price, deducted depreciation for the period in question, added the cost of accessories and determined the value which was Rs. 94,145/-.
Differential duty was accordingly demanded. The appellant filed an appeal before the Collector (Appeals) and produced what purported to be manufacturer's price list as also manufacturer's letters dated 26-9-1988 and 9-5-1989. The Collector (Appeals) held that VAT and Car Tax had to be deducted from the world car catalogue price and the net price going by the catalogue price would be 4,578 which was less than the basic price as per the manufacturer's price list, as claimed by the appellant's advocate (which was 4,889). The Collector (Appeals) accepted the basic price of the car to be only 4,889 and held that trade discount at 15/) cannot be deducted from such price and directed the Assistant to determine the assessable on that basis. It is this order which is now challenged.
2. Learned counsel for the appellant has raised two contentions before us. The first relates to the period for which depreciation was required to be deducted. The Assistant Collector deducted depreciation of 16% + 12% + 7l /2% for two years and three-quarters treating the date of the import of the car to be 26-1-1988. The actual date of import was 7-6-1988. Therefore, instead of deducting depreciation of 7 /2% for the three-quarters of the year he should have deducted 10% for four-quarters of the year. In other words, depreciation should have been given of additional 2 1/2%.
3. The second contention urged relates to the claim for deduction of 15% trade discount. It is contented by the appellant that the Assistant Collector had given the appellant the benefit of 15% trade discount, that the department did not file any appeal in regard to the same and the trade discount could not have been denied by the Collector (Appeals) in the appeal filed by the assessee and particularly, without specific notice in that behalf. If the Collector (Appeals) had gone by the world car catalogue price which was adopted by the Assistant Collector, his submission would be correct. The Assistant Collector who relied on the catalogue price deducted 15% towards trade discount. The appellant contended that the world catalogue price should not have been accepted and produced before the Collector (Appeals) what purported to be manufacturer's price list. The Collector (Appeals) preferred to go by the manufacturer's price list. This means that the entire basis of valuation was changed by the Collector (Appeals). Therefore, we are not able to agree with the submission that while changing the basis of valuation from world catalogue price to manufacturer's price list price, the Collector (Appeals) was bound to retain the benefit of deduction of 15% trade discount in the absence of any appeal by the department or specific notice to the appellant. When the appellant produced before the Collector (Appeals) the manufacturer's price list price and pressed for acceptance of the same, she was pressing for complete alteration of the basis of valuation. The Collector (Appeals) who was prepared to accept manufacturer's price list as the basis was entitled to consider afresh if from that price deduction for discount should be given or not. We find no error of law.
3A. Learned Ccounsel contended on merits that even going by the manufacturer's price list price, 15% trade discount should have been given. Two letters were produced as additional evidence by the assessee before the Collector (Appeals). Appellate order refers to these letters. Letter dated 9-5-1989 refers to the price. The other is a letter dated 26-9-1988 where reference is made to trade discount. The Collector (Appeals) has indicated that the letter does not categorically indicate that trade discount was allowed by the manufacturer to customers on the manufacturer's basic price. The appellant did not produce copies of these letters along with the present appeal or subsequently. However, the learned Counsel for the appellant has passed on to us the letter dated 26-9-1988. We are inclined to agree with the view of the Collector on the understanding of contention of this letter. The letter, considered as a whole, is not sufficient to indicate that it was the practice to allow trade discount on the manufacturer's price list price.
4. Learned Counsel for the appellant placed reliance on the decision of the Tribunal in Lt. Col. Hamender Singh Bedi v. COC - 1996 (83) E.L.T.206. Learned counsel also relied on some of the decisions referred to in that order. We have read the decision and also the relevant papers in the file relating to the appeal decided by the reported order. The reference in Hamender Singh Bedi to manufacturer's price list is actually a reference to manufacturer's tourist price list. This is what we have found on verification. Paragraph 5 of the reported order refers in earlier decision of the Tribunal in Air Vice Marshal S.K. Sareen's case where also the tourist price list was referred to. The reported order refers to another decision in Prem Kumar v. COC -1989 (40) E.L.T.340 and notes that the substance of the decision was that valuation could be made on the basis of world car catalogue price less 15% and, if the catalogue price was not available, on the basis of the manufacturer's price if available and if that was not feasible, to go by the invoice price. If the catalogue price is not to be adopted the next alternative is to go by the manufacturer's net price. This would mean there should be material to show that the manufacturer concerned was offering trade discount on sales effected by the manufacturer.
There is no such material available in this case. The purported manufacturer's price list produced before the Collector (Appeals) a copy of which has been shown to us also does not indicate that the trade discount was allowable on such price list price. In the circumstances, we hold that the decision in Hamender Singh's case is inapplicable to the present case.
5. In the result, we modify the order passed by the Collector (Appeals) by directing allowance of additional depreciation to the extent of 2 1/2% and reassessment of the assessable value and duty accordingly.