M/S UDAYANI SHIP BREAKERS LTD. versus COMMNR. OF CUSTOMS AND CENTRAL EXCISE, RAJKOT

M/S UDAYANI SHIP BREAKERS LTD. versus COMMNR. OF CUSTOMS AND CENTRAL EXCISE, RAJKOT

The appellant is not entitled to abatement of customs duty under Section 22 of the Customs Act, 1962, as no valid request was made before the Assessing Authority, and the sale to the appellant was in the course of domestic trade, not international trade. The reduced price paid by the appellant after the act of importation cannot be accepted as the assessable value for customs purposes; the original price paid by the importer to the foreign seller is the correct value under Section 14 of the Act.

Parties
Appellant: Udayani Ship Breakers Ltd.; Respondent: Commissioner of Customs and Central Excise, Rajkot
Jurisdiction
India
Judgment Date
08 February 2006
Procedural Posture
Civil Appeal / Appeal From Customs, Excise and Gold (control) Appellate Tribunal
Outcome
Appeal dismissed with costs.
Legal Topics
Customs Valuation, Abatement of Customs Duty, Domestic Vs International Trade, High Seas Sales
Customs Law Customs Valuation Abatement of Customs Duty Domestic Vs International Trade High Seas Sales

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Parties

Udayani Ship Breakers Ltd.

Appellant

Commissioner of Customs and Central Excise, Rajkot

Respondent

Procedural Posture

Civil Appeal / Appeal From Customs, Excise and Gold (control) Appellate Tribunal

Legal Issues

  1. 1 Whether the appellant is entitled to abatement of customs duty under Section 22 of the Customs Act, 1962.
  2. 2 Whether the value of the ship for customs duty purposes should be the reduced price at which the appellant purchased it on 'as is where is' basis or the original price paid by the importer to the foreign seller.
  3. 3 Whether the transaction between the importer and appellant was in the course of international trade or domestic trade.

Ratio Decidendi

The appellant is not entitled to abatement of customs duty under Section 22 of the Customs Act, 1962, as no valid request was made before the Assessing Authority, and the sale to the appellant was in the course of domestic trade, not international trade. The reduced price paid by the appellant after the act of importation cannot be accepted as the assessable value for customs purposes; the original price paid by the importer to the foreign seller is the correct value under Section 14 of the Act.

Court Disposition

Appeal dismissed with costs.

Orders

  • Order of Appellate Tribunal restored.
  • Order of Commissioner (Appeals) set aside.