Commissioner of Customs Vs. Rajender Ship Breakers - Court Judgment

Excerpt:
1. this is an application for stay of the operation of the order of the comm. appeal ahmedabad.2. the respondents imported one vessel by name of mv al aliyu for breaking which arrived at the alang anchorage on 3^rd september, 2000.3. on 3.9.2000 the shipping agent presented a copy of moa entered into between the owner of the vessel and the buyer m/s. titan ltd. nassan bahamas. this moa is dated 24.8.2000. the moa revealed that the vessel was sold for us$ 1140532 to the buyer in bahamas. the appellant signed another moa dated 7/9/2000 whith m/s. titan ltd. bahamas which indicated that the vessel was sold to the appellant for a price of us $ 1113609. the dy. c. while finalizing the assessment accepted the price (us$ 11,13,609) was against us$ 1140532 indicated in the moa dated 24.8.2000.4. aggrieved by this decision the dept. went in appeal to the commissioner (appeals). the commissioner of (appeals) in the impugned order rejected the appeal. he held that the price actually paid by the respondent to the seller i.e. u.s/$ 11,13,609/- is the price that should be taken as the assessable value, thus upholding the order of the deputy commissioner. he held that the price paid by the seller to the original owner of the ship has no relevance for the purpose of assessment. the revenue is aggrieved by this order. the revenue relies on cesat's order no. c-1/680-681/wzv/2000 dt.14-02-2000 in the case of m/s. saibaba ship breaking corpn. wherein the tribunal held that the customs duty is leviable on goods which are imported and it would be safe to say that it is the value of the goods on the date of importation that is to be considered for the purpose of levy. the revenue also relies on the standing order no. 6/99 dt.01-11-99 issued by the commissioner of customs, rajkot wherein it has been indicated that reduction in the price after the import of the vessel cannot be permitted because the vessel is brought and sold on as is where is basis and such reduced price cannot be accepted for the purpose of valuation as the same is arrived at after the import and cannot be taken as the price in the course of international trade.5. heard the d.r. and perused the records. none appeared for the respondents.6. we observe that the shipping agents who filed the i.g.m. declared that in accordance with the m.o.a dt. 24-08-2000 entered into by the original owner and the buyer in bahamas the price was us$ 11,40,532/-.the revenue wants to take this price as against the one declared by the importer at the time of filing of the bill of entry (us $ 11,13,609/-).the contention of the revenue has to be gone into while deciding the appeal. we observe that the revenue has made out a prima facie case for stay. we accordingly stay the operation of the impugned order during the pendency of this appeal.

Judgment:
1. This is an application for stay of the operation of the order of the Comm. Appeal Ahmedabad.

2. The respondents imported one vessel by name of MV AL ALIYU for breaking which arrived at the Alang anchorage on 3^rd September, 2000.

3. On 3.9.2000 the shipping agent presented a copy of MOA entered into between the owner of the vessel and the buyer M/s. Titan Ltd. Nassan Bahamas. This MOA is dated 24.8.2000. The MOA revealed that the vessel was sold for US$ 1140532 to the buyer in Bahamas. The appellant signed another MOA dated 7/9/2000 whith M/s. Titan Ltd. Bahamas which indicated that the vessel was sold to the appellant for a price of US $ 1113609. The Dy. C. while finalizing the assessment accepted the price (US$ 11,13,609) was against US$ 1140532 indicated in the MOA dated 24.8.2000.

4. Aggrieved by this decision the Dept. went in appeal to the commissioner (Appeals). The commissioner of (Appeals) in the impugned order rejected the appeal. He held that the price actually paid by the respondent to the seller i.e. U.S/$ 11,13,609/- is the price that should be taken as the assessable value, thus upholding the order of the deputy commissioner. He held that the price paid by the seller to the original owner of the ship has no relevance for the purpose of assessment. The revenue is aggrieved by this order. The Revenue relies on Cesat's order No. C-1/680-681/WZV/2000 dt.14-02-2000 in the case of M/s. Saibaba Ship Breaking Corpn. wherein the tribunal held that the customs duty is leviable on goods which are imported and it would be safe to say that it is the value of the goods on the date of importation that is to be considered for the purpose of levy. The Revenue also relies on the standing order No. 6/99 dt.01-11-99 issued by the Commissioner of Customs, Rajkot wherein it has been indicated that reduction in the price after the import of the vessel cannot be permitted because the vessel is brought and sold on as is where is basis and such reduced price cannot be accepted for the purpose of valuation as the same is arrived at after the import and cannot be taken as the price in the course of international trade.

5. Heard the D.R. and perused the records. None appeared for the respondents.

6. We observe that the shipping agents who filed the I.G.M. declared that in accordance with the M.O.A dt. 24-08-2000 entered into by the original owner and the buyer in Bahamas the price was US$ 11,40,532/-.

The Revenue wants to take this price as against the one declared by the importer at the time of filing of the bill of entry (US $ 11,13,609/-).

The contention of the Revenue has to be gone into while deciding the appeal. We observe that the Revenue has made out a prima facie case for stay. We accordingly stay the operation of the impugned order during the pendency of this appeal.