ORDER
Jyoti Balasundaram, Member (J)
1. The respondents-herein, who are engaged in the business of ship breaking, had purchased M.V. Samrat Ashok from Shipping Corporation of India in open public auction for Rs. 11,63,00,000/- and the vessel was handed over to them at the port of Sikka and later beached by them at Alang ship breaking yard. Bill of entry under Section 46 of the Customs Act, 1962 for clearance of the vessel was filed at Alang wherein the declared value was shown as above. The assessable value was determined under Rule 4 of the Customs Valuation Rules, 1988 and duty was assessed at Rs. 4,18,07,805/-, in the absence of details of cost of freight and insurance incurred in moving the vessel from Sikka to Alang. Subsequently, the respondents furnished such details, on the basis of which the assessment was modified and the total duty chargeable was worked out to Rs. 3,47,29,228/-. Against this assessment, the importers preferred an appeal to the Commissioner (Appeals), contending that duty should be charged on the basis of actual auction price plus usual landing charges and accordingly the duty payable by them is only Rs. 3,38,29,344/- and they are hence entitled to refund of excess duty of Rs. 8,99,884/-. The Commissioner (Appeals) relied upon the Tribunal’s order in their own case reported in 1989 (39) ELT 109 which was affirmed by the apex court as seen from 1999 (77) ELT A.105, to conclude that the correct value of the ship is auction price plus 1% landing charges. He set aside the adjudication order and directed refund. Hence this appeal by the Revenue.
2. None appears for the respondents in spite of notice; hence we heard the learned DR and perused the records.
3. We find substance in the claim of the department that cost of transport upto the place of importation (i.e. Alang), handling charges and cost of insurance are required to be included in the transaction value in terms of Rule 9 of the Valuation Rules. We also agree with the Revenue that the Tribunal’s order relied upon by the Commissioner (Appeals) is not applicable to the facts of the present case, as the question of inclusion of freight and insurance charges was not the subject matter for decision in the earlier case. Since the vessel was “imported at Alang” as the bill of entry for its final clearance was filed there, and not at Sikka, cost of transport and insurance from Sikka to Alang is required to be included in the transaction value. As a result, we set aside the impugned order and allow the appeal.