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2021 (12) TMI 1158 - AT - CustomsValuation of imported goods - payment for the services, sought to be included by customs authorities in the assessable value of ‘reactor set’ - enhancement of declared value - suppression of facts or not - invocation of extended period of limitation - penalty u/s 114A of Customs Act, 1962 - HELD THAT:- It is on record that the licence agreement for ‘know-how’ and ‘technical assistance’ and the purchase order for supply of the impugned goods, were both contracted separately with M/s Atofina France. Thereafter, M/s Arcil Catalyst Pvt Ltd, a producer of ‘aluminum chloride anhydrous’ and intending to expand manufacturing capacity, placed order for ‘reactor set’ from M/s Atofina France on 13th December 2000 which was assessed to duty on the contract value of the goods in bill of entry filed on 26th February 2001. Well before this, on 15th September 1999, the ‘licence agreement’ for collaboration in ‘debottlenecking’ of existing process and ‘upgradation’ of facility was entered into; it is the payment due on invoice dated 10th December 2002 for ‘technical knowhow’ and invoice dated 19th December 2002 for ‘technical assistance’ raised by M/s Atofina France in pursuance of the agreement which was sought to be added to assessable value of the goods. It would appear to have been assumed that the qualifying expression, ‘as a condition of sale’, in rule 9(1)(c) and 9(1)(e), can be stretched limitlessly to encumber the transaction value of imported goods with any, and all, other outflows of the importer to the seller merely by being so. The mismatched concatenation of facts, contrived for confirming the demand in the impugned order, is mirrored in the confused categorization of the impugned payments under two different, and mutually exclusive, contingencies that permitted inclusion of ‘services’ in assessable value. We cannot accord judicial sanction to a proposition that subsumes all commercial transactions between two entities merely for sharing commercial objective in common with a cross-border transaction in goods. The facts of the case must lead to that conclusion for approval of the proposed addition. The payment for the services, sought to be included by customs authorities in the assessable value of ‘reactor set’, became due well after the import and the obligation for providing the ‘technical knowhow’ and ‘technical assistance’ – the services in question – was contingent upon ‘certificate of conformity’ with the basic engineering package or, in other words, the readiness of the facility for ‘debottlenecking’ and ‘upgradation’ in accordance with the agreement. It is seen that this certificate was issued on 13th September 2001 following which the payment contracted in the agreement was made due by M/s Atofina France - The ‘certificate of conformity’ which, according to the adjudicating authority, is the pivot also clearly pertains to provision of service in India after import. None of these facts find fitment within the scheme of taxing of services rendered by an overseas provider at the rate of duty for assessment of imported goods as intended by rule 9 of Customs Valuation (Determination of Price of Imported Goods) Rules, 1988 set out. The demand fails along with appeal of Revenue - Appeal allowed - decided in the favor of assessee.
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