ORDER
S.S. Sekhon, Member (T)
1. After hearing the Ld DR, a common order is being passed in these appeals since the issue involved is the same.
2. After hearing Ld DR and considering the written reply on record we proceed to decide the matter. It is found-
a. These appeals have been filed by revenue and facts herein, have been taken from the case C 209 for reference. The facts in brief are, the respondents presented Bills of Entry on 11.9.2004 for clearance of a vessel imported for breaking at port Alang district Bavnagar Gujarat. Value for duty purpose was declared at US$ 7,465.55 L.T. @ US$ 167.00/LDT on the basis of a MOA dated 05.09.2000 with M/s Cane Shipping and Trading S.A.Liberia they (herein after referred to second MOA) & the Respondents. The Respondents importers bill was assessed finally on 15.10.2001. The revenue filed an appeal to Commissioner (Appeals) Customs Ahmedabad to consider the purchase price of the vessel as US$ 12,80,341.80 for 7,465.55 L.T.@ US$ 171.507 L.T. as per MOA dated 17.08.2000 entered into between M/s Wild Shipping Ltd. Malta the owner of the vessel and M/s Cane Shipping and Trading S.A.Liberia the buyer of the vessel as the transaction value, for the vessel as the same was offered effective referred to as price MOA) at the time of hr importation into India.
b) Clause 12 of the impugned order in appeal observed that the first MOA ie 17.08.2000, satisfies the requirement of Section 14 of the Customs Act as well as Rule 4 of Customs valuation (Determination of prices of imported goods) rules, 1988. The value mentioned therein has to be considered as assessable value, unless the importer justifies the reduction in price based of evidence, in accordance with second MOA.
c) At Clause 13 of the impugned Order-in-Appeal it has been observed that “The important point to be noted is the MOA will be considered as an invoice only when it clarifies that the vessel has been sold for export to India.
MOA dated 17.8.2000 between Wild Shipping they seller was and Cane Shipping and trading S.A Liberia they bear order at para 1 rules as follows Now whereas AT para 1 of the MOA dated 17.08.2000 reads as
” Wild Shipping Ltd of Valetta, Malta (hereinafter called the sellers) have today sold and Cane Shipping and Trading S.A, 80, Broad St. Monrovia, Liberia (hereinafter called the buyers) have today bought for demolition the bulk carrier ‘prime’ … … … … … … ..with light displacement of 7585 MT = 7465.55 LT … … … … … . with all her available outfit anchor and chains … … … … Excluding master, officers and crews personal effects company logbooks, stationery forms … … … … … . And items stated in Clause 13 hereunder at port official outer anchorage at west coast India (Alang) … … … … … … .
Further, as per Clause 3 of the said MOA read as:
“The vessel shall be physically delivered ‘AS IS WHERE IS’ and taken over safely afloat, substantially intact, under her own power free of cargo, free of charter, free of fire damage, free of permanent ballast, with all holds empty and hatches closed. No removals except as stated hereunder in Clause 13 with main engine/all generators in working condition at port of delivery outer anchorage at Alang in India … … … … … … .. The vessel shall be delivered between 20th August and 15th ‘ September 2000.
d) The said vessel arrived at Alang anchorage on 2.9.2000, the same was boarded on 4.9.2000 and the Entry Inward was granted on 8.9.200. Thus, the vessel was delivered, at safe outer anchorage port Alang, India. Therefore it is clear that the said vessel was sold to M/s Cane Shipping and Trading SA vide first MOA dated 17.8.2000 for export and delivery Port Alang India. M/s Royal Shipping show the vessel to M/s Cane Shipping and Trading SA vide first MOA dated 17.8.2000 at USD 1280341.80 and this vessel was imported in India on 2.9.2000 for delivery at that price therefore the finding of the Commissioner in Clause 14 of the impugned order that in the MOA dated 17.8.2000 entered between Wild Shipping Ltd and Cane Shipping and Trading SA does not show that the Vessel was sold for export the India is not proper and legal as the same was not based on facts. The price of US$ 1280341.80 at which the vessel was sold wide MOA 17.8.2000, should be the transaction value as per Rule 4 of the Customs Valuation Rules, 1988. In the case of Sai Baba Ship Breakers wide CI/680-81/-WZB/2000 dated 14.02.2000 it was held by the Tribunal that price reduction after importation of vessel in India cannot be considered.
In the instant case, description of the vessel in both the MOAs are same which are reproduced below:
MOA dated 17.08.2000 entered into between M/s. Wild Shipping Ltd. and M/s. Cane Shipping and Trading S.A. shows the vessel description as under:
20. The vessel is described as follows:
NAME OF VESSEL : MV PRIME
EX-NAMES: PERCA 1, ORCA, LENIN SK, LITA
TYPE OF VESSEL: BULK CARRIER
DEAD WEIGHT: 34995 MT
BUILT: 1975, ASTILLEROS ESPANOLES SA, FACTORIA DE SEVILLA, SPAIN
FLAG: MALTA
PORT OF REGISTRY: VALLETTA
GT/NT: 19309/11429
LENGTH: 185.93 M
BREADTH:24.20M
DEPTH: 15.20 M
MAIN ENGINE: ONE, MANISES-SULZER-SPAIN, DIESEL ENG NO.
(310) MODEL: 7RND68, REVOLUTION PER MIN 150, BHP 11550
AESA SULZER
GENERATING SETS: THREE, WARTSILA-VISA-FINLAND,
TYPE 424 TS SPEC: 11040, BHP: 640, RPM: 720
WORKING PROPELLER: NO
SPARE TAILSHAFT: YES
LIGHT WEIGHT: 7585 METRIC TONS/7465.55 LONG TONS
SPARE ANCHOR: YES
CONSTRUCTION: STEEL
BALLAST TANKS: FORE PEAK/AFT PEAK/DOUBLE
BOTTOM/TOP
SIDE ALTHOUGH TO THE BEST OF THE SELLERS
KNOWLEDGE THE BALLAST TANKS ABOVE WERE
INITIALLY COATED THE SELLERS HAVE NO EVIDENCE OF
SAME AND CAN GIVE NO GUARANTEE AS TO WHETHER
THERE ARE ANY TRACES OR VISIBLE SIGNS OF
COATING(S) LEFT
SINGLE SKIN: YES
TRADING HISTORY: LAST 7 CARGOES, BULK BARLEY,
COAL, ROCK PHOSPHATE, BAGGED RICE, WHEAT IN
BULK, YELLOW CORN, SBM+ SORGHUMS.”
As per MOA dated 5.9.2000 entered into between M/s. Cane Shipping and trading S. A and M/s Gujaral Ship Trade corporation, Plot No. 12, Alang, the vessel’s description reads as follows:
TYPE: BULK CARRIER
NAME: MV PRIME
EX “PERCA 1” EX “ORCA”
GRT/NRT : 19309/11429 TONS
BUILT: 1975/SPAIN
FLAG: UAE
LOA X BEAM : 196.00 X 24.20 METERS
LDT: 7585 MT I.E. 7465.55 LONG TONS
MAIN ENGINE: SULZER 7RND68 ABT 11550 BHP
MAIN GENERATORS 3 X WARTSILA 525 KVA
EMERGENCY GENERATOR : 1 X CATTER[O;;ER. ABT 120 HP
WORKING PROPELLER: None
SPARE PROPELLER: NONE
SPARE TAIL SHAFT: YES -ONE
BALLAST TANKS: FORE PEAK/AFT PEAK/DOUBLE
BOTTOM TOPSIDE, ALTHOUGH TO THE BEST OF THE
SELLERS KNOWLEDGE THE BALLAST TANKS ABOVE
WERE INITIALLY COATED. THE SELLERS HAVE BO
EVIDENCE OF THE SAME AND CAN GIVE NO GUARANTEE
AS TO WHETHER THERE ARE ANY TRACES OR VISIBLE
SINGS OF COATINGS(S) LEFT.
LAST CARGOES: BULK BARLEY, COAL, ROCK
PHOSPHATE, BAGGED RICE, WHEAT IN BULK, YELLOW
CORN, SBM + SORGHUMS.
(e) On a combined reading of the two MOAs it is seen there was no change found in the vessel, for sale by the MOA. Hence transaction value of US dollars which was offered of sale delivery Alang India as per the said first MOA dated 17.8.2000 should be a assessable value declared by the respondents was not tenable. The Commissioner Customs (Appeals) has erred in considering 3 % buying commission to M/s Cane Shipping and Trading S.A the buyer, in the price offered in the MOA dated 17.8.2000 and accordingly approved the reduction. Such a reduction is not permitable under Customs valuation goods.
f) We find sufficient force in the submissions made by revenue for setting aside the order of lower authorities as we do not find any reason to reduce the value for the goods, which for sale of delivery at port Alang as per original MOA dated 17.8.2000.
3. In view of the findings, the order are set aside & Revenue appeal allowed. After setting aside the order of the lower authority.
(Pronounced in court)