Per S.S. Kang

Heard both sides.

2. The appellant filed this appeal against order-in-appeal passed by the Commissioner of Customs (Appeals). The brief facts of the case are that the appellants are engaged in the activity of ship breaking. The appellant entered into an agreement for purchase of a ship MV 'HERMAE'. Memo of Agreement dated 28.6.99 is for the purchase of above mentioned vessel at the total price of US $ 529,402.33. Thereafter on 12.7.99 the Memo of Agreement dated 28.6.99 was amended to the effect that in view of the Super Structure of the vessel partly of aluminium and partly of iron and steel with wood in cabins the purchase price of the vessel was reduced to US $ 478,726.35. The appellant filed Bill of Entry declaring the value of the vessel is US $ 478,726.35. The Custom authorities enhanced the price as per the original Memo of Agreement and assessment was made accordingly.

3. The contention of the appellant is that as the appellant purchased the vessel at the price mentioned in the Bill of Entry and there is no evidence on record to show that price was reduced to evade payment of duty. The appellant also relied upon the finding of the Commissioner where the Commissioner (Appeals) held that there is no quarrel with the proposition that the price mentioned in the addendum is the price at the time of importation. The contention is that after deciding the issue in this way the Commissioner only rejected the price reduced on the ground that the appellant had not produced any evidence to show that there was any deficiency in the vessel which is to be considered for reduction in price. The appellant relied upon the decision of the Tribunal in the case of CC, Ahmedabad vs. Atom Manohar Ship Breakers Pvt. Ltd. reported in 2003 (156) ELT151 to submit that valuation could not be insisted on the original price as what was imported was different from the original agreement and the price was reduced after taking into account the deficiencies in the goods. On the other hand, Revenue relied upon the decision in the case of CC, Ahmedabad vs. Guru Ashish Ship Breakers reported in 2003 (157) ELT 277 where the Tribunal held that there was no provision in the original agreement for reduction of price. Therefore, the subsequent amendment to the agreement is not a valid ground for reduction in price.

4. We find that the Commissioner (Appeals) in the impugned order in para-8 admitted the factual position and the legal position by saying that price mentioned in the addendum dated 12.7.99 is the price at the time of importation and there is no quarrel with the aforesaid proposition. We find thereafter the Commissioner (Appeals) rejected the price as per addendum dated 12.7.99 on the ground that the appellant failed to show that there was any deficiency in the vessel as mentioned in the addendum. In the present case, as the sale price of the vessel is the price agreed between the parties and the addendum dated 12.7.99 there is nothing on record to show that this addendum was prepared just to evade payment of duty and the appellant had paid higher price. The Tribunal in the case of Guru Ashish Ship Breakers relied upon by the Revenue after taking into consideration four survey reports came to a conclusion that the reduction in the price was due to non-existence of any deficiency mentioned in the revised price agreement. In the present case there is no survey report to rebut the claim of the appellant that the price was reduced on account of deficiency in the super structure as the super structure consists partly of aluminium and partly of iron and steel. In the original Memo of Agreement it was mentioned only of aluminium with wood in cabins. The Tribunal in the case of Atam Manohar Ship Breakers relied upon by the appellant specifically held that valuation could not be insisted on the original price and the price at the time of importation is to be considered as the value for assessment of the imported goods. In the present case as th