Page 93 - ELT_15th May 2020_VOL 372_Part 4th

2020 ] COMMISSIONER OF CUS. (PORT), KOLKATA v. STEEL AUTHORITY OF INDIA LTD. 483

decision of the Supreme Court, contrary to the findings of the Deputy
Commissioner and Commissioner (Appeals), supports the appellant’s case.
The perusal of the orders-in-original reveals that there is no dispute what-
soever with the services as shown when the designs and drawings and en-
gineering/technical services were small enabled to locate plant direction
and overall project implementation for manufacturing iron and steel pro-
jects to be commissioned in India and the costs and charges were collected
when the design and drawings and engineering services in relation to the
components to be imported and/or imported. In such circumstances, it is to
be held that the lower authorities have heard improportionate to hold that
the said charges are to be added to the assessable value as assessed relying
upon the case of TISCO reported in 2000 (37) RLT 239 (S.C.). Para 8, 11 and
15 to 17 thereof refer. We do not find any reason to uphold the reasoning of
the Deputy Commissioner in this regard.
In view of the clear cut decision in the case of Tata Iron & Steel Co. Ltd. case
(supra), we find that the issue is very settled by series of decisions of this
Tribunal and heard the case referred into Indo Gulf Corpn. Ltd. v. Commr. of
Customs, 2005 (182) E.L.T. 77 (T).
Neither in Section 14 of the said Act nor in the Valuation Rules is there any
provision which provides that the cost of drawings and technical docu-
ments required for procurement or manufacture of goods in India by the
importer or which relates to post-importation activities for assembly, con-
struction, erection, operation and maintenance of the plant are to be includ-
ed in the price of equipments for determining their transaction value and
consequently their assessable value for the purpose of levy of customs duty
under the said Act. On the contrary the “Interpretative Notes” to Rule 4 of
the Valuation Rules, 1988 makes it explicitly clear that value of imported
goods shall not include, inter alia, the charges for construction, erection, as-
sembly maintenance of technical assistance undertaken after importation of
the imported goods such as 3 of the Contract in the instant case in deter-
mining the assessable value of the imported equipments imported by the
appellant is wholly erroneous, ultra vires the said Act and/or the Customs
Valuation Rules, 1988. This also the Deputy Commissioner and the Com-
missioner (Appeals) failed to appreciate and/or take into consideration and
thereby arrived at patently erroneous finding.
In terms of Rule 9[1][b][iv] of the Valuation Rules, 1988, in determining the
transaction value the value apportioned as appropriate of, inter alia, engi-
neering, design and plans and sketches undertaken elsewhere than in India
and “necessary for the production of the imported goods” which were sup-
plied directly or indirectly by the buyer free of charge or at a reduced cost
to the supplier or imported goods for use in producing the imported goods
being value are to be included. This is because such supply of free of charge
or at a reduced cost would result in a lower price for the imported goods
than the price that the supplier would have charged if such goods/services
were to be paid for in full. This rule is also inapplicable in the instant case
as there has been no supply or any engineering’s or drawings by the appel-
lant to the foreign seller. Moreover, there was no supply free of charge or at
reduced cost. Hence this rule also has no applicability whatsoever in the
present case.”
(quoted verbatim)
8. It is against this order the revenue is in appeal before us. Before we
EXCISE LAW TIMES  15th May 2020  93