Page 206 - ELT_15th August 2020_Vol 373_Part 4

540 EXCISE LAW TIMES [ Vol. 373

Government of India. The second letter dated 2nd February, 2015 also emphasises
that urea is imported for direct agriculture use on Government account through
STEs and that “these agencies” are paid Rs. 17/- per MT as service charges on the
urea imported by them on Government Account. The “agencies” referred to are the
STEs, i.e. MMTC, State Trading Corporation Limited and Indian Potash Limited.
21. This apart, what needs to be noticed is that TDS has also been de-
ducted by the Government of India while making payment of service charges to
the STEs. Under the Income Tax Act, TDS is required to be deducted on payment
of commission and not on sale consideration. Thus, the Government of India it-
self is treating this amount of Rs. 17/- per MT as commission paid to the STEs.
22. It also needs to be noted that the amount of Rs. 17/- per MT is paid
by the Government of India to the STE and is not paid by the Appellant to the
STE when it purchases the urea. It, therefore, clearly transpires that the canalis-
ing agencies import urea on behalf of the Government of India for which they are
paid commission of Rs. 17/- per MT for identifying and indenting the import of
urea from foreign suppliers.
23. It is in this light that Rule 10(1)(a) and (e) of the 2007 Valuation
Rules, on which reliance has been placed by the Revenue, have to be examined.
The said rules are as follows :
“Rule 10. Cost and services. - (1) In determining the transaction value,
there shall be added to the price actually paid or payable for the imported
goods, -
(a) The following to the extent they are incurred by the buyer but
are not included in the price actually paid or payable for the im-
ported goods, namely :-
(i) Commissions and brokerage, except buying commissions;
(ii) The cost of containers which are treated as being one for
customs purposes with the goods in question;
… … …
(e) All other payment actually made or to be made as a condition
of sale of the imported goods, by the buyer to the seller, or by the
buyer to a third party to satisfy an obligation of the seller to the ex-
tent that such payments are not included in the price actually paid
or payable.
… … …
(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.”
24. Rule 13 provides that the interpretative notes specified in the
Schedule to the rules shall apply for interpretation of the rules. Interpretative
note to Rule 10 is as follows :
“Note to Rule 10 - In Rule 10(1)(a)(i), the term “buying commissions”
means fees paid by an importer to his agent for the service of representing
him abroad in the purchase of the goods being valued.”
25. A perusal of Rule 10(1) shows that in determining the transaction
value, there shall be added to the price actually paid or payable for the imported
goods, amongst others, commissions and brokerage, except buying commissions.
EXCISE LAW TIMES  15th August 2020  206