TMI Blog2010 (4) TMI 659X X X X Extracts X X X X X X X X Extracts X X X X ..... annot be treated as having no nexus to the value of the imported goods - Counsel for the Department that the payment made to M/s. Voltas Ltd. has a direct nexus to the value of the goods imported – No reason to interfere in order holding inclusion of such payment - CDM/164/2004 - A-281/KOL/2010 - Dated:- 20-4-2010 - S/Shri S.S. Kang, Vice-President and M. Veeraiyan, Member (T) REPRESENTED BY : S/Shri J.P. Khaitan, Sr. Advocate and Sudhakar Prasad, Advocate, for the Appellant. Shri K.M. Mondal, Consultant, for the Respondent. [Order per : M. Veeraiyan, Member (T)]. - This appeal is against the impugned order of the Commissioner (Appeals) No. KOL/CUS/CKP/170/2004, dated 21-6-2004. 2. Heard extensively the S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and assess the condition of the machinery and recommend the needed spares. Such services rendered by them have no direct nexus to the goods imported by them. The stipulation of 8% or 10% of the value of imported goods as amount payable to M/s. Voltas was only by way of a measure for the services rendered by M/s. Voltas Ltd. Even if the said services were to be rendered by the American based supplier, such a services could not be held to have a direct nexus with the goods imported and the value could not be included in the assessable value of the imported goods. If a third party in India i.e. other than Voltas Ltd. were to render the said services, then also the same would have to be paid for. Therefore the question of loading the amount pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the said quotation for supply is clearly subject to the following condition : "You are to pay an additional eight (8) percent of the total FOB amount on a pro-rata against each shipment to our Indian distributor, M/s. Voltas Ltd., Calcutta in Indian rupees at the exchange rate prevalent on the date of air consignment note/bill of lading within 21 days from the date of submission of their invoice along with a set of non-negotiable copies of the shipping documents. This payment is to be made to Voltas and is not to be deducted from the FOB amount payable to us against the Letter of Credit." He also referred to documents titled "Voltas Ltd. terms and conditions", wherein it is clearly mentioned that "the prices quoted are EXCLUSIVE of ou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mported goods; that the payment to Voltas is made purely based on understanding between the American based supplier and M/s. Voltas Ltd. and that the appellant had no role in this regard. He also submits that the various services rendered by M/s. Voltas Ltd. were done only on behalf of US based supplier; that they rendered there services in their capacity as the agent of US based supplier; that the services were to identify the requirement of the spares to be imported and therefore the payment made has a direct nexus to the imported goods. 5.4 He submits that the decisions relied upon on behalf of the appellant were on facts different from the facts of the present case. He relies on the following decisions in support of his submissi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e are no imports, no payments are apparently due to be made to whatever services attributed to M/s. Voltas. In other words, the payments have been made only in connection with the sale of goods, apparently due to the reason that M/s. Voltas Ltd. is an agent/distributor of the US based supplier. 6.2.1 The decision of the Hon'ble Supreme court in the case of J.K. Corporation Ltd. (cited supra) lays down the guidelines to certain aspects of valuation in the following terms : "9. The basic principle of levy of Customs duty, in view of the aforementioned provisions, is that the value of the imported goods has to be determined at the time and place if importation. The value to be determined for the imported goods would be the paym ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nical assistance, undertaken after incorporation on imported goods such as industrial plant, machinery or equipment; (b) The cost of transport after importation; (c) Duties and taxes in India." 6.2.2 In light of the above ratio laid down by the Hon'ble Supreme Court, the charges for post importation activities would not become part of the assessable value of the imported goods. However, in the present case, the services rendered by M/s. Voltas Ltd. can be treated as relating to the post importation activities. 6.3 The Hon'ble Supreme Court in the case of Ferodo India Pvt. Ltd. has taken note of Rule 9(1) of the Customs Valuation Rules according which "all other payments actually made or to be made as a condition of sa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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