TaxTMI 
TaxTMI 
TaxTMI 
2025 (9) TMI 140
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....ssel lost control of its anchor and hit the rocks near Oyster Island and broke into two pieces and partially submerged at about 3 nautical miles off Karwar Port. After the accident, the District administration and Port Department had made the owners responsible to salvage the wrecked vessel. The owners appointed M/s. Smith International to carry out the salvaging operation of fuels and they salvaged the fuel from the submerged vessel. The owners of vessel sold the wreck to M/s. Chenco Marine, USA who in turn sold the same to M/s. Star Matrix, Hong Kong. The appellant intended to cut the wreck ship into transportable pieces at the place of wreck and intended to transport them through barges to unload at Karwar Port. Also, they intended to break the ship in the private bonded warehouse located on the Karwar Port wharf so that the same can be transported by trucks conveniently. Since it was impossible to shift to port wharf and also to pull the wreck vessel caught between the rocks, the appellants were permitted to salvage the wrecked ship at midstream and permitted to bring the salvaged parts to customs notified area at port wharf from salvaged point, for further breaking. Since the ....
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....und of Rs.21,61,530/-. Thereafter, the Department wrote letters to the appellant from 15.02.2010 to 20.10.2010 to furnish the details of expenses incurred on cutting and transportation of salvaged materials, which they failed to submit. In their letter dated 26.10.2010, the appellant had submitted various documents including balance sheet and other documents. The appellant was given a personal hearing. Later, the adjudicating authority after hearing the appellant and analysing the balance sheet and other documents submitted by the appellant, assessed the Bills of Entry and confirmed the differential duty of Rs.78,07,948/-. Aggrieved by the said order, the appellant filed appeal before the learned Commissioner(Appeals), who in turn rejected their appeal. Hence, the present appeal. 3.1. At the outset, the learned advocate for the appellant has submitted that as per Section 14 of the Customs Act, 1962, the place of importation is the place where the ship was lying off Karwar Port near Oyster Rock. The appellants were permitted to file warehousing bond Bill of Entry describing the ship as wreck ship for salvaging at the place where the it was lying. Further, as per Section 46 of the C....
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.... of "MV Ocean Seraya" ship was on "as is where is" basis and the ship is in wreck condition was lying near Karwar Port and Customs had allowed filing of warehousing Bill of Entry at that place. Further, what they brought to the notified area was not the ship but after the breaking wrecked ship into further parts. Further, the learned advocate has submitted that reference to para 5(c) of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 by the learned Commissioner is incorrect inasmuch as in the appellant's own case, the import was complete and warehousing Bill of Entry was filed and assessed; therefore, further expenses are incurred only for breaking the ship into parts and turning into scrap and loading and unloading, handling charges at the place of importation @ 1% of CIF is already included in the assessable value. Thus, in view of the judgment in Coramandal Fertilisers Ltd. Vs. CC [2000(115) ELT 7 (SC)], further loading and unloading charges cannot be added to the value of the wrecked ship. 4. Learned Authorised Representative (AR) for the Revenue has reiterated the findings of the learned Commissioner(Appeals). He has submitted that in the peculiar....
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....rtable pieces at the said place of wreckage and bring them through barges to unload at Karwar Port. Also, they have intended to further break the said pieces in private bonded warehouse located on the Karwar Port wharf which could be transported in trucks, conveniently. Acceding to the said request, the appellant was allowed to file the In-to Bond Bill of Entry No.272/07 dated 12.10.2007 for wrecked ship for breaking even though the wrecked ship was at the place of wreckage away from the Karwar Port near Oyster Rock. Taking the net LDT of the broken vessel as 10893 MTs, the value was declared as 1100193 USD C&F for the wrecked ship on "as is where is" basis; added 1.125% on MOA value as insurance charges. Accordingly, the appellants have calculated the PMT value of the scrap as Rs.4131.46. The Department through their letter dated 12.10.2007 asked the appellant to submit details of freight charges from the place of wreckage off Karwar Port and also the entire salvage cost; in response, vide letter dated 12.10.2007, the appellant requested for provisional assessment of the Bill of Entry as they could not furnish details and exact expenditure to be incurred on freight and cutting cos....
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....uting the addition of barging charges i.e. cost of transportation of goods from the place of wreckage to the Karwar Port. 9. The Revenue's contention on the other hand is that in the peculiar facts of the case, the appellant was allowed to file into-Bond Bill of Entry when the appellant expressed inability to bring the wreck vessel towing from the place of wreckage to the Karwar Port, but could only be brought in pieces and thereafter further the process of breaking be carried out in the bonded warehouse at the Karwar Port Wharf; hence that cannot be construed as the basis for assessment, when the appellant itself has undertaken and requested for provisional assessment to file subsequently the actual cost of transportation and other charges in bringing the wrecked ship to the Karwar Port. 10. We find merit in the argument of the Revenue inasmuch as permission to file Into-Bond Bill of Entry was allowed by the Department in the peculiar facts and circumstances of the case and that too at the request of the appellant since the broken vessel at the Oyster rock could not be shifted/ transported to the Karwar Port / warehouse for breaking without converting into smaller pieces. The ap....
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....d. vs. UOI [1999(113) ELT 358 (SC)] is squarely applicable to the facts of the present case as the place of import would be at the Karwar Port and not the place where the ship was lying after wreckage i.e. Oyster rock. Their Lordships held as follows:- "20. We do not agree with the aforesaid submission because what has to be arrived at is a deemed price in the manner indicated in the said Section. In determining this deemed price in international trade the element of port charges which have to be borne by the importer, in addition to the CIF value, before the goods can be cleared for human consumption must necessarily form a part or an element of the value. The said Section does not accept as final the price fixed by the purchaser and the seller in the course of international trade as reflected in the CIF contract but it requires determination of value by the customs authorities in the manner indicated therein. What has to be seen is the value or cost of the imported articles at the time of importation i.e. at the time when they reach the customs barrier. Landing charges which have to be paid to the Port Trust must therefore, be taken into consideration while determining the valu....