TaxTMI 
TaxTMI 
2023 (5) TMI 51
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....ay. During boarding of the vessel, the surveyor M/s Pinnacle Marine Services reported that the LDT of the vessel was 4999.20 MT. The said survey report also reproted presence of approximately 575 MT of cement concrete stored on the ship. Another survey was conducted by Murlidhar Shenvi Insurance Surveyors and their report dated 18.11.2012 ascertained the weight of cement concrete as 507 MT. 2.1 On 22.11.2012 the appellant entered into a MoA with Ace Exim Private Limited (seller) for purchase of said vessel for the purpose of demolition / breaking up @ US $ 15,90,930/-. The said MoA determined the LDT of vessel as 4999.20 less 507 MT cement concrete and net LDT of 4485.20. 2.2 On 24.11.2012 the IGM filed was amended with a name of new buyer. 2.3 The Appellant sought clearance of the goods at USD 15,90,930/- appearing in the MoA dated 22.11.2012 between Ace Exim Private Limited and the appellant. The Revenue assessed the goods on the basis of MoA dated 05.11.2012 entered between Ace Exim Private Limited and the earlier buyer namely Alang Auto and General Engineering Company Private Limited of USD 17,28,000/-. The provisional assessment was finalized at transaction value of U....
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....d by the revenue before this Court in Civil Appeal No. 146 of 2004 [2009 (233) E.L.T. 145 (S.C.)]. While allowing the appeal and setting aside the order of the Tribunal primarily on the ground that the addendum was a self-serving document, the Court observed thus: "We may also point out that in this case we are basically concerned with the genuineness of the addendum to the MOA dated 13th April, 1999. If one looks at the said addendum, we find that the date on which the said addendum stood executed is not given. Further, when did the addendum stand incorporated in the MOA. We do not find the date on which the clause stood inserted in the MOA. Further, the said addendum does not give any reason for reduction in the price from US $ 9,70,960.23 to US $ 8,70,960.23. Further, the most clinching factor to be seen is that the said addendum appears to have been executed at the request of the buyer. In our view, this is a self-serving document. In this connection, it may also be noted that the MoA dated 13th April, 1999 states that the vessel is bought on "as is where is" basis. If that be the case, we do not know on what basis the value of the vessel stood reduced from US $ 9,70,9....
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....o accept the price actually paid or payable for the goods as the transaction value, except where exceptions enumerated in Rule 4(2) are attracted, which is not the case here. It is, therefore, manifest that both Section 14(1) and Rule 4 provide that in the absence of any of the special circumstances indicated in Section 14(1) and particularised in Rule 4(2) of the 1988 Rules, the price paid by an importer to the seller in the ordinary course of commerce is to be taken as the transaction value for the purpose of valuation of goods. 16. Having regard to the afore-stated legal position, the controversy at hand narrows down to the question whether the transaction value of the vessel is to be price mentioned in the original MOA or the reduced price indicated in the addendum. We are of the opinion that in light of the statutory provisions, the factum of actual payment of the price in terms of the addendum cannot be ignored while determining the value of the vessel under Section 14 of the Act. We may, however, hasten to add that in such a situation the genuineness and the necessity of reduction in the price are required to be scrutinised very carefully. 17. As afore-stat....
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.... of the purchase price in accordance with the terms of the letter of credit to the sellers, so as to enable them to instruct their agents at the port of delivery as well as the Master of the vessel for providing the beaching assistance. The buyers had an option to cancel the agreement or to seek appropriate reduction in the purchase price in the event of the vessel suffering marshal damage due to any reason before delivery. If the buyers were not able to open the letter of credit or to take delivery in the manner specified due to any of the reasons stated in the MOA over which they had no control, the agreement was to be considered as null and void and the letter of credit was to stand immediately released to the buyers. 13.2 Thus, delivery of the vessel was of paramount importance and it is evident, from the stipulations of the MOA in all these matters, that the title in the ship passed at time of its delivery to the buyer. These arrangements are in consonance with the provisions of Section 26 of the Sale of Goods Act, 1930, that unless otherwise agreed, the goods remain at the seller's risk until the property therein is transferred to the buyer, but when the property the....
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....so a statutory provision contained in Section 64A(1) of the Sale Goods Act, 1930 which contemplates increase or decrease in contract price depending upon the variation in the duty of Customs or Excise on goods [Section 64A(2) of Sale of Goods Act]. 14. It is thus clear that that the price originally fixed in the MOA was not inflexible and it could be varied by mutual agreement of the parties to the contract. In other words, the parties were free to negotiate the price originally fixed and bring about a variation in the original contract in which event they will not be held bound to the terms of the original contract and the altered terms will now bind them. In the facts of the present appeals, all the reductions in prices have been made in writing signed by both the parties to the original contract and there is no doubt expressed against the genuineness of such addendums nor is there any material on record on the basis of which the validity of the addendums can be doubted. It is recorded in the addendums that the reduced price was mutually agreed upon between the sellers and buyers for the reasons mentioned in the addendums. In some cases, the purchase price was reduced be....
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....pon by the parties to the contract prior to the date of import will be relevant and taken into consideration for the purpose of determining assessable value under Section 14 of the Customs Act, 1962. However, if there is any variation in price after the date of import the same shall not be relevant for the purpose of determining assessable value under Customs Act unless the reduction is on account of facts that the goods are not the ones which have -been contracted for or that there has been serious beach of the terms of the contract which makes the contract void/voidable. In the latter case the new/reduced price under the new/revised contract will be admissible, provided its in conformity with the value as defined under Section 14 of the Customs Act read with the Valuation Rules." It is seen that the acceptance of original declared price is dependent on the fact that there is no variation in the nature of goods which had been contracted. In the instant case, it is seen that the LDT of the goods appearing in the original MoA is different from the LDT mentioned in the later MoA in these circumstances, the decision of Tribunal in the case of Lucky Steel Industries may not be appli....