Sachin Kshirsagar SS Offshore Private Limited Vs Commissioner of Customs (CESTAT Mumbai)
The four appeals arose from Order-in-Original No. CAO/29/2018-19 dated 26 November 2018 concerning the import of the old and used self-propelled platform supply vessel Sagar Fortune. The vessel was declared at a value of ₹13,82,89,200 under tariff item 8901 9000. The impugned order altered its classification and valuation, resulting in a differential duty demand of ₹3,53,25,921 under Section 28(4) of the Customs Act, 1962, along with interest, confiscation under Section 111(m), and redemption fine of ₹2.50 crore. Differential duty of ₹24,36,879 was also ordered on high-speed diesel, lubricating oil and hydraulic oil, with confiscation and redemption fine. Penalties under Sections 112 and 114AA were imposed on the importer and other appellants.
The dispute involved three elements: undeclared or misdeclared stores and bunkers, inclusion of freight, insurance and other charges in assessable value, and the applicable tariff classification. Before the Tribunal, the appellant restricted its contentions to valuation and classification.
On valuation, the appellant relied on the transaction value reflected in the purchase documentation, contending that the vessel was purchased for US$2,100,000 and that enhancement to ₹40,58,64,821 was not consistent with Section 14 of the Customs Act, 1962 and the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007. The appellant also challenged the rejection of the first Chartered Engineer’s valuation and reliance on a second Chartered Engineer appointed by customs.
