Page 97 - ELT_15th May 2020_VOL 372_Part 4th

2020 ] COMMISSIONER OF CUS. (PORT), KOLKATA v. STEEL AUTHORITY OF INDIA LTD. 487

(i) Where the cost of transport referred to in clause (a) is not as-
certainable, such cost shall be twenty per cent. of the free on
board value of the goods;
(ii) The charges referred to in clause (b) shall be one per cent. of
the free on board value of the goods plus the cost of transport
referred to in clause (a) plus the cost of insurance referred to in
clause (c);
(iii) Where the cost referred to in clause (c) is not ascertainable,
such cost shall be 1.125% of free on board value of the goods :
Provided further that in the case of goods imported by air, where the cost
referred to in clause (a) is ascertainable, such cost shall not exceed twenty
per cent. of free on board value of the goods :
Provided also that where the free on board value of the goods is not ascer-
tainable, the costs referred to in clause (a) shall be twenty per cent. of the
free on board value of the goods plus cost of insurance for clause (i) above
and the cost referred to in clause (c) shall be 1.125% of the free on board
value of the goods plus cost of transport for clause (iii) above,
(3) Additions to the price actually paid or payable shall be made under
this rule on the bases of objective and quantifiable data.
(4) No addition shall be made to the price actually paid or payable in de-
termining the value of the imported goods except as provided for in this
rule.”
9. The main case of the appellant is that these two cases involved im-
portation of turnkey projects and the entire contract value have to be treated as
the transaction value for the purpose of charging customs duty. Mr. Agarwal has
submitted that the design and the other items, which were the subject of dispute,
were integrally linked with the equipments and supply of the services were con-
ditions for importation of the equipments. It has also been argued on behalf of
the revenue that the contracts were integrated from basic planning and designing
till implementation at site and what was imported was a project and not merely
equipments. On this count, our attention was drawn to Rule 9(l)(e) of the 1988
Rules, which we have quoted earlier in this judgment.
10. The Tribunal did not accept this plea of revenue. The Tribunal in
the impugned order accepted SAIL’s plea for segregating the value of equip-
ments and the other fees on services covered by the same contracts, the latter
charges meant for post-importation phase of the arrangement between the con-
tracting parties. It found that the designs and drawings and engineer-
ing/technical services were for plant direction and overall project implementa-
tion for manufacturing iron and steel to be commissioned in India and charges
were collected by the consortium when the design and drawings and engineer-
ing services in relation to the components were to be imported. It is also not the
revenue’s case before us that these designs and drawings and the services were
in relation to the imported equipments and goods.
11. Major part of the argument on behalf of the revenue advanced be-
fore us, however, was anchored to Rule 9(1)(e) of the 1988 Rules. The revenue’s
contention on this point, which formed the basis of the orders of the authority of
the first instance as also the first appellate authority has been that these were
turnkey contracts and hence import of designs and drawings etc. even for post-
importation activities should be treated as condition of import of the equipments.
EXCISE LAW TIMES  15th May 2020  97