ORDER
T.P. Nambiar, Member (J)
1. This is an appeal filed by the department against the orders passed by the Collector (Appeals). In terms of that order he concluded that the depreciation of 46% granted to the appellant is not sufficient. He raised the depreciation to 66%. He further held in his order that the value addition with respect to the air-conditioner and other parts separately is not warranted in the facts of the case in view of the fact that it is a Grand Luxury car. He also held in the impugned order that as far as the freight is concerned, the freight no doubt is to be added but notional freight is to be added. It is these findings which are challenged before us.
2. The ld. JDR Shri Rama Rao in this regard drew our attention to the Order-in-Original wherein the adjudicating authority has accepted the actual price of the car and gave a deduction of 15% towards trade discount and VAT as well as depreciation of 46% and exchange rate. He, therefore, stated that as far as the addition of price of air-conditioner and other parts are concerned, the Asstt. Collector was justified in adding the value because they are not usually supplied with the car. He, therefore, pointed out that this aspect of the Collector (Appeals) is not correct.
3. With respect to giving of depreciation of another 20% on the ground that the car was used for more than 4 years, he stated that the same is not warranted in law.
4. With respect to the freight charge, he pointed out that notional freight charge is not sufficient in this case. He, therefore, pointed out that the car was ordinarily supplied by ship and therefore this aspect also is not correct.
5. Replying to the above contention, the ld. Advocate Shri A.V. Somasundaram for the respondent stated that the Collector (Appeals) has taken into consideration that this was mentioned as “G.L. Model” car which goes to show this a Grand Luxury car as the luxury cars are usually fitted with air-conditioner/heater, stereo equipment etc. He, therefore, pointed out that the parts of the car includes all these luxury items which are annexed to the same. In that view of the matter, he pointed out that addition of price of these fittings again is not called for in view of the fact that the Grand Luxury car is supplied with the above items.
6. With respect to adding of 20% more discount, he stated that ordinarily for the car used for 4 years, depreciation of 46% is allowed and in those circumstances when this car is used for another 6 more year, it is permissible to grant another 20% discount.
7. He also pointed out that as far as the freight is concerned, the Collector (Appeals) has dealt with this aspect. He pointed out that the expression used is “average freight”. So this amount has to be arrived at on the basis of ordinary mode of transport for such car and not when imported in container. In this view of the matter, he stated that the notional freight amount is to be added.
8. We have considered the submissions made by both sides. As far as the first point is concerned, we find that the Collector (Appeals) has held that on examination it was found to be a Grand Luxury car. The very word” luxury’ indicates that it has got certain luxurious items fixed to the same. Therefore, the Collector (Appeals) came to the conclusion that since this is a GL car it is supplied with these air-conditioner/heater, stereo equipment etc. and on that count he came to the conclusion that separately their value could not be again added as they were supplied as luxury car in the very same condition. In the absence of any evidence in this regard, we find no ground to interfere with this finding of the Collector (Appeals) and we confirm the same.
9. As far as the second aspect is concerned, the Collector (Appeals) has stated that for a car which is used for 4 years, the normal depreciation is 46%. Therefore, he came to the conclusion that in the present case when the car is used for a period more than 4 years i.e. 10 years, another 20% should be added. In this connection, we find the decision of the Tribunal reported in 1992 (59) E.L.T. 329 (T) wherein at para 7, the Tribunal took note of this fact and held that as per the instructions issued by the Board, maximum depreciation of 46% is permissible in respect of cars used for a period of 4 years and for the car used for periods exceeding 4 years, the depreciation has to be worked out on ad hoc basis having regard to the condition of the car. Therefore, the Tribunal in that case held that an inspection of the car on the basis of its actual condition had to be determined as a fair assessment method. In this case, therefore, since the car is used for more than 4 years, the depreciation should have been worked out on the actual condition of the car at the time when it was imported. No such inspection is made in this case. The Asstt. Collector has taken note of the condition of the car. The Collector has not taken any such inspection in this regard. He only held that having regard to the fact that the car was more than 4 years old at the time of shipment it will be reason to allow further reduction of 20%. But there is no inspection report available to show the actual condition of the car. In the above circumstances, we are of the view that giving a depreciation of 20% on the available evidence is not warranted and we reduce the same to 10% depreciation. To this extent, the department’s appeal in this regard is allowed.
10. As far as the freight is concerned, the Collector (Appeals) has taken into consideration that the expression used is ‘average freight’ and this is to be arrived at on the basis of ordinary mode of transport and he had held that notional freight to be added and we find no reason to interfere with this finding of the Collector (Appeals). Accordingly, the department’s appeal is partially allowed holding that the depreciation over and above 46% is restricted to another 10%. With this modification the appeal is partially allowed and the car may be valued accordingly.
11. The appeal is partially allowed in the above terms with consequential relief, if any, in accordance with law.