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TaxTMI 
TaxTMI 
TaxTMI 
2023 (10) TMI 539
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....to M/s. Shirdi Steel Traders in India. M/s. Snow Drop Company Limited's agent namely M/s. Labdhi Shipping Agency Pvt. Limited filed prior IGM on 29.10.2010 and submitted copies of MOA (memorandum of agreement) dated 11.10.2010 entered between the owners and cash buyers reflecting the purchase price USD 61,31,400/-. The MOA entered between cash buyers namely M/s. Snow Drop Company Limited and M/s. Shirdi Steel Traders was also submitted to the Customs authorities. 2. The Revenue received some information from a firm namely M/s. Croft Sales and Distribution Limited, Wickhams Cay I, British Islands wherein a copy of bill of sale dated 22.10.2010 issued by the owners in favour of cash buyer namely M/s. Snow Drop Company Limited were submitted. As per the bill of sale dated 20.10.2010 submitted by informer, the value of the vessel namely MV Basil was indicated at the rate of USD 63,68,295/-. On receipt of the information the department re-examined the documents/ MOA filed by importer in respect of the said vessel along with prior IGM and the department found that the purchase price mentioned in the MOA dated 11.10.2010 was at the rate USD 61,31,400/- which was not in conformity with th....
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....te appearing for the appellants argued that Adjudicating Authority was wrong in holding that actual value of MV Basil was misdeclared with an intention to evade customs duty to the tune of Rs. 13,15,956/- however, in fact the lowering of the value by the foreign supplier namely M/s. Snow Drop Company Limited to the importer M/s. Shirdi Steel Traders, due to changes in the circumstances due to late signing of original contract between the owner of the vessel namely M/s. Diva Meritime and the exporter (supplier of the vessel M/s. Snow Drop Company Limited). The circumstances which lead to reduced value are such as delay in supply of the vessel, reduced availability of fuel on the vessel and non supply of tools kits along with the vessel. The learned advocate has vehemently opposed the charges of suppression of value. It has been contended that the appellant would certainly not make any misdeclaration only for saving a petty amount of Rs. 13,15,956/-. 5. Learned advocate has contended that for the purpose of Section 14 of the Customs Act, 1962 what is relevant for establishing the transaction value in terms of legal provisions is the price which is to be paid by the importer namely M....
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.... the more or less same facts, in Para 13, observed as under:- "13. Any sale of goods after the act of "import" within the meaning of the Act is over, can only be described as a sale in the course of domestic trade and not a sale in the course of international trade. Inasmuch as MOA was enacted in respect of ship which has already arrived on 21-07.2001, such sale agreement has to be treated as sale in domestic market as observed by Hon'ble Supreme Court. Inasmuch as the price of ship in the international market stand duly reflected in the earlier MOA dt. 13-07-2001, adoption of the same for the purposes of duty cannot be faulted upon". The Learned advocate has also relied upon the Hon'ble Supreme Court judgment in the case of Chaudhary Ship Breakers vs. CC, Ahmedabad - 2010 (259) ELT 161 (SC). 7. The Learned advocate also mentioned that initially the agreement between the owner and the cash buyer namely M/s. Snow Drop Company Limited indicated the price of the vessel at USD 63,68,295/- was also changed on the same date to USD 61,31,400/- and therefore, the reliance of the department on the value mentioned in the earlier MOA is of no use as the same was changed on the same date a....
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....d of appeal that another MOA which is between the same parties namely M/s. Diva Meritime (the owner of the vessel) and M/s. Snow Drop Company Limited (cash buyer) is also dated 10.10.2010 and wherein the price of the vessel indicated as USD 61,31,400/-. The relevant portion of the MOA is reproduced below:- We also find that both the agreements are dated 11.10.2010 and same has been signed by the same persons. On perusal of above agreements, we are of the opinion that the MOA dated 10.10.2010 wherein the price indicated as USD 63,68,295/- some sort of a performa invoice rather than actual sale agreement. The basic evidence on which the department has relied upon is this agreement wherein the price has been indicated as 63,68,295/- whereas we find that on the same date and by the same party another agreement has been signed wherein the price agreed between the owner and the cash buyer is USD 61,31,400 (CIF). 10. Before proceeding further, it will be relevant to have a reference to the legal provisions with regard to the imported goods. The Section 14 of the Customs Act, 1962 provides as follows:- "14 Valuation of goods. - (1) For the purposes of the Customs Tariff Act, 1975 (51 o....
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.... M/s. Chaudhary Ship Breakers vs. CC, Ahmedabad - 2010-TIOL-86-SC-CUS. The relevant portion of the decision is reproduced below:- "11. Mr. Pawan Shree Agrawal, learned counsel appearing for the appellant, while assailing the impugned order, strenuously urged that since under Section 14 of the Act the value of the goods is deemed to be the price at which such or like goods are ordinarily sold in the course of international trade, the price that was actually paid by the appellant in terms of addendum dated 8th December 1997, is to be adopted as the "transaction value" in terms of Rule 3 read with Rule 4(1) of the Customs Valuation (Determination of Price of Imported Goods) Rules, 1988 (for short "the 1988 Rules") for the purpose of levy of customs duty under the Act. Learned counsel commended us to the GATT Customs Valuation Code, which, inter alia, contemplates that if the parties agree upon a price adjustment promptly, even if there is nothing in writing between them on the subject, the Customs should accept the adjusted price as the basis for transaction value. 12. Per contra, Mr. V. Shekhar, learned senior counsel appearing for the revenue, supported the order of the Tribunal....
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....ording to Section 14(1) of the Act, assessment of customs duty under the Customs Tariff Act, 1975 is to be made on the value of the goods imported. Unless the value of the goods is fixed under the sub-section (2) of Section 14, the value has to be determined under sub-section (1) of the said Section. The value, as per Section 14(1), as it stood prior to its amendment with effect from 10th October 2007, shall be deemed to be the price at which such or like goods are ordinarily sold, or offered for sale, for delivery at the time and place of importation - in the course of international trade. The word "ordinarily" is clarified in the Section itself, which describes an "ordinary" sale as one "where the seller and the buyer have no interest in the business of each other and the price is the sole consideration for the sale...". According to Section 14(1A) price of imported goods is to be determined in accordance with the Rules framed in this behalf. Under Rule 3(i) of the 1988 Rules, the value of the imported goods shall be the "transaction value". Transaction value has been defined in Rule 2(f) as meaning the value determined in accordance with Rule 4. Rule 4(1), in turn, states that "....