1997 (3) TMI 293 - AT - Customs

CEGAT Tribunal Adjusts Customs Duty Assessment Based on Ship Weight, Emphasizing Accuracy and Fairness

The Appellate Tribunal CEGAT, New Delhi modified the initial duty assessment based on ship weight for customs duty. The tribunal considered a survey ... Valuation - Vessel Issues:1. Determination of ship weight for customs duty2. Interpretation of Light Displacement Tonnage (LDT)3. Impact of ship age on weight determination4. Relevance of physical verification for weight assessmentAnalysis:The judgment by the Appellate Tribunal CEGAT, New Delhi revolves around the challenge to an order regarding the determination of ship weight for customs duty. The appellant, purchaser of a ship for ship breaking, contested the order based on the ship's Light Displacement Tonnage (LDT) as per the Trim and Stability Book and auction notice. The LDT recorded was 13,759.34 MTs, but a survey by M/s. Metcalfe & Hodgkingson estimated a 30% loss due to corrosion and depreciation, suggesting a lower weight of 9631.54 MTs at the time of import. The initial duty assessment was based on the higher LDT, leading to a dispute and subsequent appeals.The tribunal considered the survey report's findings and the discrepancy in weight estimation. The surveyor's report highlighted the ship's condition and the lack of physical verification for weight loss estimation, leading the lower authorities to reject the appellant's plea. The tribunal noted the excisable nature of ship breaking and the importance of accurate weight determination for duty assessment.Regarding the interpretation of LDT, the tribunal referred to Chapter Note 2 in Chapter 89, specifying LDT as per the Stability Book or builder's certificate. However, as this note was effective post the ship's import, the tribunal ruled that the LDT in the Stability Book need not be the sole consideration for duty assessment.Considering the ship's age and the physical verification showing the weight of scrap post-breaking, the tribunal determined a weight of 11007 MTs for duty imposition, factoring a 20% reduction from the recorded LDT. The judgment modified the previous orders, directing a reassessment of duty based on the revised weight and leaving the consequential relief adjudication to the relevant authority.In conclusion, the tribunal's decision addressed the challenges in ship weight determination for customs duty, emphasizing the importance of accurate assessment methods, considering the ship's age, and ensuring fair duty imposition based on reliable data and interpretations of LDT.