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2015 (1) TMI 406 - CESTAT MUMBAIValuation - Inclusion of Process Licence Agreement; Basic Engineering Services; and supervisory services in the assessable value of the capital goods imported by the appellant - Demand of differential duty - Rule 9(1) (c) and 9 (1) (e) of the Customs Valuation Rules, 1988 (CVR in short) read with Section 14 of the Customs Act, 1962 - Held that:- We have perused all the agreements entered into by the importer appellant with the foreign supplier. It will be useful and relevant to note some of the terms and conditions of these agreements to understand the nature of the transaction. It is also relevant to note that all the agreements were entered into on the same day - A combined reading of these agreements make it very clear that all these agreements are interlinked and inter-dependent and have direct nexus with each other. It is only in pursuance of these agreements, the supply of the equipment have been made by Davy/HYL and the services provided by these agreements are necessary and essential for the installation, operation, maintenance and use of the equipment by the appellant. Thus these four agreements constitute a package and cannot be separated from one another and the consideration paid under these different agreements, forms an integral part of the supply of equipment agreement. It is in the light of the factual matrix discussed above, the question whether the royalty payments made in respect of technical know-how and the various fees paid for engineering services and supervisory services are includible in the value of the equipment supplied under Rule 9 (1) (c) and 9(1) (e) of CVR, 1988 has to be examined. Royalty paid for the Process Know-how and the various fees paid for basic engineering services and supervisory services are includible in the assessable value of the equipment imported under Rule 9(1)(c) and 9(1)(e) of CVR, 1988 as these payments are integrally connected with the supply of the equipment and formed part of a package deal. Therefore, we do not find infirmity in the order passed by the lower authorities in this regard. - The obligations under these agreements remain intact and we do not understand how the appellant can take this plea. For determination of assessable value, not only the amounts paid but required to be paid under the contracts entered with the supplier have to be taken into account. In the absence of any conclusive evidence to show that the payments so far made is towards the final settlement of all the obligations, the appellant's plea in this regard cannot be entertained. CA certificate is not the authority for determination of liabilities and future obligations arising out of contract. In the absence of any satisfactory evidence duly certified by the foreign equipment supplier, the plea of the appellant in this regard cannot be entertained and therefore, the lower authorities have rightly rejected this contention and we do not find any infirmity or illegality in such a decision. - Decided against Assesse.
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