Ghasiram Gokulchand Vs C.C. Jamnagar (CESTAT Ahmedabad)
In the instant case, CESTAT find that the genuineness of the MoA dated 22.11.2012 has not been doubted. It is also noted that the LDT mentioned in the MoA dated 05.11.2012 between Ace Exim Pvt. Ltd. and Alang Auto & Gen. Engg. Pvt. Ltd. was not found to be correct when the surveyor boarded vessel. The MoA dated 22.11.2012 contains a different a LDT which is lower by 507 MT. In these circumstances, we hold that the decision of Hon’ble Apex Court in the case of Chaudhary Ship Breakers (supra) will apply. Since the new MoA dated 22.11.2012 has not been found to be incorrect or fabricated and there was variation in the specification of the goods imported, the Revenue cannot reject the price mentioned in the MoA dated 22.11.2012.
FULL TEXT OF THE CESTAT AHMEDABAD ORDER
These appeals have been filed by Ghasiram Gokulchand and Ghasiram Gokalchand Ship Breaking Yard against finalization of provisional assessment under section 18(1) of the Customs Act, 1962.
2. Learned Counsel for the appellant pointed out that the vessel M.V. Montevideo arrived at the Alang Shipyard on 07.11.2012. An MoA dated 05.11.2012 was entered between M/s Ace Exim Private Limited (seller) and M/s Alang Auto & General Engineering Company Private Limited (Buyer) for purchase of vessel at USD 17,28,000/- and LDT declared in the said MoA was 4999.20 MT. The said ship was boarded on 09.11.2012 by Customs officers and entry inward was granted on the same day. During boarding of the vessel, the surveyor M/s Pinnacle Marine Services reported that the LDT of the vessel was 4999.20 MT. The said survey report also reproted presence of approximately 575 MT of cement concrete stored on the ship. Another survey was conducted by Murlidhar Shenvi Insurance Surveyors and their report dated 18.11.2012 ascertained the weight of cement concrete as 507 MT.
2.1 On 22.11.2012 the appellant entered into a MoA with Ace Exim Private Limited (seller) for purchase of said vessel for the purpose of demolition / breaking up @ US $ 15,90,930/-. The said MoA determined the LDT of vessel as 4999.20 less 507 MT cement concrete and net LDT of 4485.20.
2.2 On 24.11.2012 the IGM filed was amended with a name of new buyer.
2.3 The Appellant sought clearance of the goods at USD 15,90,930/-appearing in the MoA dated 22.11.2012 between Ace Exim Private Limited and the appellant. The Revenue assessed the goods on the basis of MoA dated 05.11.2012 entered between Ace Exim Private Limited and the earlier buyer namely Alang Auto and General Engineering Company Private Limited of USD 17,28,000/-. The provisional assessment was finalized at transaction value of USD 17,28,000/- mentioned in the MoA dated 05.11.2012 rejecting the value declared by the appellant of USD 15,90,930/- agreed on the MoA between the appellant and the Ace Exim Private Limited vide MoA dated 22.11.2012. The appeal filed by the appellant before Commissioner (Appeal) was rejected. Aggrieved by the said order, the appellants are in appeal before Tribunal.
2.4 Learned Counsel relied on the decision of Hon’ble Apex court in case of Chaudhary Ship Breakers 2010 (289) ELT 161 (SC) in which it has been held that the factum of actual payment of price in terms of agreement between parties cannot be ignored while determining the value of vessel under Section 14 of the Act. Reliance was placed on the decision of Tribunal in the case of Jai Bharat Steel Industries 2005 (192) ELT 792 which was upheld by the Hon’ble Apex Court as reported in 2016 (340) ELT A 138 (SC). Learned Counsel argued that sine the transaction value is available under Rule 4(1) of the Customs Valuation Rules then there is no question of determination in any subsequent rule. He further argued that the genuineness of MoA dated 22.11.2012 has not been doubted by any authority and therefore, the value prescribed therein should be accepted as the transaction value for the purpose of assessment. He also relied on the decision of Hon’ble Apex Court in the case of Rai Metal Works 2010 TMI 160 SC to assert that the cases where genuineness of agreement between parties was not questioned by Revenue the price declared in the agreement has to be accepted.
3. Learned Authorize Representative relies on the impugned order. He relied on the following decisions:
