Page 99 - ELT_15th May 2020_VOL 372_Part 4th

2020 ] COMMISSIONER OF CUS. (PORT), KOLKATA v. STEEL AUTHORITY OF INDIA LTD. 489

(S.C.)] was cited before us by Mr. Agarwal. But ratio of that authority would not
be applicable in the facts of this case, as the disputed amount involved payment
made by the importer to their overseas associate towards engineering, design
work, plant, sketches etc. which were necessary for production of imported
goods. This was a case attracting Rule 9(l)(b)(iv) of the 1988 Rules. Factually, this
authority is distinguishable. The other authority on which Mr. Agarwal has
placed reliance is a decision of this Court in the case of Commissioner, Delhi Value
Added Tax v. ABB Limited reported in (2016) 6 SCC 791. In this case the controver-
sy was as to whether a contract for supply, installation, testing and commission-
ing of traction electrification power supply and power distribution for the
Dwarka Section of Delhi Metro Rail Corporation Limited could be subjected to
Delhi value added tax or not. But this case dealt with the issues of works contract
and movement of goods by inter-State trade for computing value added tax. The
transaction in that case was held to be movement of goods by way of imports or
by way of inter-State trade and hence covered by the Central Sales Tax Act. The
only factual similarity in both these cases is that the case of ABB Limited (supra)
also related to turnkey project. But “import” under that statute and the charging
section in the Customs Act for imposing duty (under Section 12) are not the
same. The mechanism for arriving at transaction value or assessable value under
the two statutes are different and distinct. This authority can have no impact on
the subject-controversy.
14. The appellant’s case in substance is that on a composite reading of
Section 14 of the Act, Rules 4 and 9(l)(e) of the 1988 Rules, the price of drawings,
design etc., should be added to the invoice value of the imported equipments, as
those intangible items formed an integral part of the arrangement agreed upon
between the two consortia and SAIL. The revenue described such arrangement
as turnkey contracts. It has been specifically argued that such intangible items
constituted conditions of sale within the meaning of Rule 9(l)(e) of the 1988 Rules
and these are not post-importation charges.
15. Stand of the respondent, on the other hand is that those items relat-
ed to post-importation activities of SAIL in India for implementation of their
project. Their case is that only imported equipments could be subjected to duty.
Referring to the charging provision for levy of duty, being Section 12 as also Sec-
tion 14 of the Act, it was argued that to reach the assessable value, Rule 9 of the
1988 Rules was the only mode. So far as subject-dispute is concerned, Rule 9(1)(e)
read with the interpretative note did not permit addition of value of post-
importation items. Spares and other specifications concerning such equipments
were already included in the price of the equipments. In support of his argument
for exclusion of post-importation services which may be obtained from a foreign
consortium, Mr. Bagaria referred to the aforesaid Note, which reads as :-
“Note to Rule 4
Price actually paid or payable
The price actually paid or payable is the total payment made or to be made
by the buyer to or for the benefit of the seller for the imported goods. The
payment need not necessarily take the form of a transfer of money. Pay-
ment may be made by way of letters of credit or negotiable instruments.
Payment may be made directly or indirectly. An example of an indirect
payment would be the settlement by the buyer, whether in whole or in part,
of a debt owed by the seller.
EXCISE LAW TIMES  15th May 2020  99