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Customs - Case Laws
Showing 41 to 60 of 181 Records
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2016 (9) TMI 1121 - CESTAT KOLKATA
Confiscation of empty bags under Section 118(b) of the Customs Act, 1962 - huge quantities of sugar stored in the house of one Amal Mali for illegal export to Bangladesh - search of premises on seizure of sugar/ empty bags - restriction on sale/export of sugar came into operation only by a letter dated 10/5/2006 issued by Ministry of Consumer Affairs Food and Public Distribution - Held that: - even intention to export and preparation alone are not sufficient to constitute an attempt and has to be associated with a positive penultimate commission/act, depending upon the circumstantial evidences available in each case. The decision in the case BABBAN KHAN Versus COLLECTOR OF CUSTOMS (PREVENTIVE) [1992 (9) TMI 208 - CEGAT, CALCUTTA ] followed.
Any violation of a procedural requirement under Sugar (Control) Order 1966 that too for the period after 10.05.2006, for local movement/ control of sugar, cannot be made as the basis for confiscation of the sugar under Section 113 of the Customs Act, 1962. These provisions are applicable only when any prohibited goods are brought inside a customs area for export and not to local movement of goods in India, outside customs area or goods stored in a godown. Sugar is also not a notified/specified category of goods under the Customs Act, 1962 which cannot be brought near the international border - confiscation of sugar and imposition of penalties set aside.
Confiscation of empty bags under Section 118(b) of the Customs Act, 1962 - Held that: - goods, if brought in packed form into a customs area then such packages are liable to confiscation. Here, neither the seized goods are contained in packages nor brought into customs area for export. There is also no evidence to indicate that exported goods, if any, were once contained in the empty gunny bags seized by the department. Provisions of Section 118(b) of the Customs Act, 1962 are not applicable to the empty gunny bags confiscated by the Adjudicating Authority. Such confiscation of empty gunny bags is bad in law - confiscation of empty bag is set aside.
Appeal allowed - decided in favor of appellant.
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2016 (9) TMI 1120 - CESTAT KOLKATA
Revocation of CHA license - forfeiture of security deposit - Regulation 20(1) of Customs House Agents Licensing Regulations 2004 - declaration of consignment as photocopying machines - on examination Red Sanders Wood found - whether Adjudicating authority is justified in revoking the CHA license of the appellant under Regulation 20 (1) for not discharging the obligations under Regulation- 13 (a), (d) & (o) of CHALR? - Held that: - CHA is required to verity the antecedents of his clients & suitably advice them.
At no stage, appellant had the knowledge that there is any irregularity in the export/ import consignments. The goods imported were put to first check examination and the importer very well exists. Similarly the export consignment was received in a sealed container duly examined & certified by the jurisdictional Central Excise authorities. The exporter is also existing. Bills of entry & shipping bill were filed by the appellants based on the documents furnished by the importer / exporter. If there was any irregularity in the documents then the same was also available before the assessing officers and the Customs examining officer. If the same could not be detected by the appellant the same also could not be detected by departmental assessing/ examining officers. There is no evidence on record that appellant came to know of any irregularity before the same were detected by the department or that he did not advise the concerned clients - It is also observed that the points of difference from the Inquiry report are not so glaring to justify revocation of CHA license as held by the Adjudicating authority.
The whole spirit of obligation of the CHA under the CHALR is to establish the indentity of the importer/exporter & appropriately advise his clients, is existing - reasonable steps were taken by the appellant to comply with Regulation -13 (a), (d) & (o) of CHALR.
Revocation of license and forfeiture of security deposit not justified - appeal allowed - decided in favor of appellant.
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2016 (9) TMI 1119 - CESTAT KOLKATA
Valuation - loading the assessable value on the basis of other brand of goods - Westride Brand - LingLong Brand - CIF value - whether or not first appellate authority has correctly loaded the assessable value of the Chinese origin tyres? - Held that: - No evidence is available on record that both the above brands of tyres of Chinese origin are having same qualities and market standards in China Identical goods and similar goods are defined in Rule 2 (c) & 2 (e) of the Customs Valuation (Determination of Valuation) Rules, 1988.
The decision in the case of M/s. Deekay Exports Vs. Commr. of Customs, Calcutta [1996 (9) TMI 401 - CEGAT, CALCUTTA] has been relied upon where it was held that a quantity of 18 MT of glycerine imported by M/s. Shalimar Paint cannot be held to be contemporary for import of 144 MT of glycerine imported by Appellant Deekay Exports.
The case of C.C. New Delhi Vs. D.M. International [2013 (5) TMI 549 - CESTAT NEW DELHI] relied upon where it was held that quality, import of origin, place and time of import are relevant factors and NIDB data cannot be made the basis for enhancement of value.
The quantity of tyres imported by the appellant is much more than the quantity imported in the relied upon bill of entry. Further independent Delhi importers have also imported China origin tyres at values lower than the value of relied upon bill of entry. The brand name of the tyres imported by the appellant is Linglong whereas the brand name in the relied upon Bill of Entry is Westride . There is no evidence on record that both these brands of Chinese origin are similar - loading the assessable value on the basis of other brand of goods not justified - appeal allowed - decided in favor of appellant.
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2016 (9) TMI 1118 - CESTAT KOLKATA
Valuation - import of Crystal beads of marquise shaped glass with coating on its back - whether enhancement in declared value has been correctly made and upheld by the lower authorities with respect to glass beads/Chattons imported by the appellant? - Held that:- The customs authorities are bound to assess duty on the transaction value and does not allow the department to ascertain an imaginary value based on the basis of DOV data. Only in exceptions specified in Section 14 of the Customs Act, 1962 can the department follow Customs Valuation Rules. The supplier of glass beads and importer are not related persons and there is no evidence on record that any amount in excess of what has been declared by the appellant has been repatriated by the appellants. Thus there is no ground for rejecting the transaction value.
Appellant has been importing the same goods at the declared/invoice value and no objection was raised for those contemporary imports of the appellant. There is also no evidence on record whether contemporary imports relied upon by the department are Identical goods or similar goods as defined in Rule 1(c) & 1 (e ) of the Customs Valuation (Determination of Imported goods) Rules 1988. There is thus no reason to doubt the declared/invoice value paid by the appellant - enhancement of assessable value in the present proceedings is arbitrary and not justified.
Appellant has declared the same description what is given in the invoice/customs documents not only in the present bill of entry but in the other imports of the same appellant. Assessable value of the synthetic glass beads is showing vide variations from ₹ 9.20/kg. to ₹ 19,069/- per kg. There is no wilful misstatement on the part of the appellant or any evidence indicating that some extra amount has been repatriated to the supplier for the present consignment. - confiscation of imported goods and imposition of penalty not attracted.
The decision in the case of Eicher Tractors Ltd. Vs. C.C., Mumbai [2000 (11) TMI 139 - SUPREME COURT OF INDIA] followed.
Appeal allowed - decided in favor of appellant.
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2016 (9) TMI 1117 - CESTAT MUMBAI
Demand of duty forgone on imported material - exemption availed under Notification No. 53/97-Cus dated 03.06.1997 - EOU engaged in manufacture of Polyester Texturised/Dyed Yarn - Partially Oriented Yarn - The entire consignment of POY imported by them was sold to M/s. Arihant Synthetics Ltd., without any processing - inter-unit transfer of goods - is the transfer of goods to another unit results to violation of conditions stipulated in Notification No. 53/97-Cus dated 03.06.1997 and is demand of duty forgone justified? - Held that: - it does not require existence of any valid reason for transfer of goods to another EOU. No restriction imposed in respect of supply from one EOU to another such EOU. The dates and events were examined by the Commissioner and it was found that these events would constitute a valid reason in terms of para 6.16 of the EXIM Policy - demand of duty not justified.
Earlier the Appeal No. C/771/05 was filed in form E.A-5. However, the Asst. Register vide letter dated 24.06.2005 informed the appellant that appeal needs to be filed in C.A-5 instead of E.A.5. Accordingly, an appeal in the form C.A-5 was filed. The earlier appeal filed before this Tribunal in Appeal No. C/771/05 therefore becomes infructuous and duplicate.
Appeal disposed off - decided against Revenue.
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2016 (9) TMI 1093 - CESTAT BANGALORE
Revocation of CHA licence - forfeiture of security deposit - regulation no. 19(1) of the CBLR 2013 - imposition of penalty - Held that: - It is the responsibility of the CB to question the importer or exporter regarding the legal provisions and procedures. Also it is their duty to invite attention of the Department if they come across any fraud or duty evasion, any import or export related activity in stead of certifying as a trustful intermediate between department and trade, but facilitate the fraud as well as to safeguard Government s revenue. The CB in this case had violated rules and regulations stipulated in CBLR 2013. - the decision in the case Commissioner of Customs Versus M/s K.M. Ganatra & Co. [2016 (2) TMI 478 - SUPREME COURT] has been relied upon.
Violation of Regulations of CBLR - revocation of licence and forfeiture of security deposit justified - imposition of penalties upheld - appeal rejected - decided against appellant.
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2016 (9) TMI 1092 - DELHI HIGH COURT
Scope of review in review petition - denial of deemed export benefits if the Bill of Entry is in the name of the project authority - monetary claim in the writ petition - review petition on the ground that decision is erroneous - maintainability - can the scope of the review to the extent desired by the senior counsel for the petitioner/review applicant be widened which may have far reaching ramifications affecting the justice delivery system? - Held that: - the decision in the case The State of West Bengal Versus Kamal Sengupta and another [2008 (6) TMI 578 - Supreme Court Of India] is relied upon.
The counsel for the petitioner at the outset only sought permission to withdraw the Special Leave Petition with liberty to file review petition and which permission was granted. The fact that the petitioner was also granted liberty to, if remaining aggrieved, again question the judgment, does not entitle the petitioner/review applicant to a wider consideration than is permissible in review jurisdiction.
No ground found for review - petition dismissed - decided against petitioner.
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2016 (9) TMI 1091 - BOMBAY HIGH COURT
Stay of interim order for a period of four weeks so as to enable the petitioner to challenge the order passed in higher court - encashment of Bank Guarantee - imported corn - entitlement to petitioner of equitable and discretionary interim relief - Held that: - When the encashment is by the authorities under the Foreign Trade Act, 1992 and the Central Government, no reason seen for the apprehension on the part of the petitioner that in the event they succeed, the amount would not be returned back by the authorities. The Government and such competent authorities can encash the bank guarantee - stay of interim order rejected - petition dismissed - decided against petitioner.
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2016 (9) TMI 1090 - DELHI HIGH COURT
Condition for provisional release of goods - quasi-judicial order - maintainability - demand of differential duty - execution of bank guarantee of 30% of the differential duty - Held that: - the condition for release is modified to the extent that instead of the entire differential duty the appellant be directed to deposit ₹ 15 lakhs. The other conditions would, however, remain undisturbed. The adjudicating officer should conclude the hearing at his earliest convenience and pass final orders - appeal allowed - decided partly in favor of appellant.
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2016 (9) TMI 1089 - BOMBAY HIGH COURT
Valuation - demand of customs duty on license fee paid to the overseas licensor - payment of service tax on license fee - reverse charge mechanism - import of set top boxes - multi-channel down-linking - distribution and transmission of technology - HITS operator - consignments of set top boxes stored in customs bonded warehouse - clearance of set top boxes for home consumption avoiding appropriate payments of customs duty and giving wrong declarations - seizure - confiscation under Section 111(m) of the Customs Act, 1962 - provisional release of goods on furnishing bank guarantee - Held that: - it is only on the investigation being concluded and appropriate steps taken, that the authorities can issue a show cause notice and demanding amounts now styled as a Customs Duty on the licence fee.
The petitioners are relying on the principle that what is really embedded and as claimed, are not goods but it is intellectual property services. They are relying on the payment of Service Tax and in that regard, the DRI could not have proceeded on the footing and in the facts and circumstances of the present case that there is a definite evasion. It is their duty to bring such cases of alleged evasion to the notice of the customs, which they have after the outcome of the investigation, whenever they are concluded. It is thereafter for the Commissioner of the Customs and all authorities under the Customs Act to take appropriate steps and measures.
Provisional release of goods permitted - petitioners to furnish a Bond for securing differential duty payable, on the licence fees and Special Additional Duty so as to secure the redetermined value - petitioners to furnish a Bank Guarantee to the extent of 25 %, to secure the amount of the alleged differential duty, on licence fees - petition disposed off - decided partly in favor of petitioner.
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2016 (9) TMI 1088 - DELHI HIGH COURT
Refund claim after adjustment of customs duty - demand of differential duty - mis-declaration of goods - imported paper - Held that: - Once the adjudication was completed and the true value determined, it is the differential duty which has to be deposited. That differential duty and no other amount can be recovered from the petitioner or even the deposit made by it. At the same time, since the petitioner has not disputed its Director’s liability, the Court is of the opinion that even the amount of ₹ 10 lakhs cannot be claimed at this stage given that a concession to that effect is made in the prayer clause.
The respondents directed to process the petitioner’s refund and ensure that the excess amount after adjusting the differential duty and further adjusting the penalty of ₹ 10 lakhs, repay/refund the balance within three weeks along with interest as admissible. The respondents shall pass a speaking order in this regard. The bank guarantees furnished by the petitioner pursuant to the Court’s order during the pendency of adjudication shall also be discharged.
Petition allowed - decided in favor of petitioner.
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2016 (9) TMI 1087 - CESTAT KOLKATA
Denial of benefit of Notification No.105/99-CUS dated 10.08.1999, as amended - imposition of penalty under Section 112(a) of the Customs Act, 1962 - confiscation of imported goods - classification - processed cloves - Notification No.73/95-CUS(NT) dated 07.12.2005 - The Customs Tariff (Determination of Origin of Goods under Agreement on SAARC Preferential Trading Arrangements) Rules, 1995 (SAPTA Rules) - Bangladesh origin - valuation of cloves - whether the main appellant is eligible to avail partial exemption under Notification No.105/99-CUS dated 10.08.1999 when read with SAPTA Rules?
Held that: - As per the first Proviso to this Notification, the Assistant Commissioner/Deputy Commissioner/Joint Commissioner has to be satisfied that imported goods are in accordance with the Customs Tariff (Determination of Origin of Goods under the Agreement on SAARC Preferential Trading Arrangement) Rules, 1955- [SAPTA Rules]. As per Rule 4 of the SAPTA Rules read with its Schedule even products processed in the member countries are eligible for concessions under SAPTA Rules when the base goods are not produced/manufactured in the contracting countries. The only requirement under these Rules is that a certification of origin has to be produced for availing concessions as issued by the designated authority of Govt. of exporting contracting state and notified to the other contracting states in accordance with the certification procedures mentioned in the form annexed to SAPTA Rules.
It is observed from various provisions of SAPTA Rules and Notification No.105/99-Cus dated 10.08.1999 that there is no discretion or power with the Customs authorities to reject the certificate of origin given by the concerned contracting state. Para 9 of the same Schedule does give power to the contracting states to review/modify the said Rules.
The decision the case ZUARI INDUSTRIES LTD. Versus COMMISSIONER OF C. EX. & CUSTOMS [2007 (3) TMI 12 - SUPREME COURT OF INDIA] is relied upon - Certificates of origin produced by the Appellant cannot be discounted. There is no evidence on record that designated authority of Bangladesh under SAPTA Rules was maliciously involved with the supplier of cloves and the Appellant.
Processing of cloves - Held that: - minor activities done by the supplier will not make the goods as processed cloves and that such processed cloves come into existence only when oil is extracted from natural cloves.
Only an appropriate authority of Bangladesh can certify as to what would be the value addition, after satisfying about the nature of processing activities done by the supplier and the extent of expenses incurred by such supplier in carrying out the activities of cleaning, handling, storage, sorting, packing etc. The decision in the case Chandreswar Singh v. State of Assam [1978 (8) TMI 190 - GAUHATI HIGH COURT] is relied upon.
Certificates of origin issued by the designated authority under SAPTA cannot be rejected which is the only requirement for the satisfaction of the Customs department under Notification No.105/99-Cus dated 10.08.1999 - confiscation of goods and imposition of penalties fails - appeal allowed - decided in favor of appellant.
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2016 (9) TMI 1012 - CESTAT AHMEDABAD
Condonation of delay - show cause demand notice for duty short paid forwarded to supplier as litigation was carried on by the supplier - impression that appeal would be filed by the supplier - reminder received for recovery of confirmed dues - Held that: - the principles of law as laid down in the case of Office of The Chief Post Master General Vs M/s Living Media India Ltd [2012 (4) TMI 341 - SUPREME COURT OF INDIA] is followed.
No action has been initiated by the applicant in ascertaining the fact whether the appeal had been prepared by the said M/s Ganpati Energy Pvt. Ltd. and filed till the reminder for recovery of dues was received from the Department. Needless to mention that the applicant was fully aware of the fact that the reply to the Show Cause Notice and the appeal before the learned Commissioner (Appeals) against the adjudication order had been filed through them only and the same cannot be independently filed by M/s Ganpati Energy Pvt. Ltd. Therefore, it is difficult to accept that the aforesaid non-action by the applicant has been bonafide and devoid of negligence.
Delay not condoned - appeal dismissed - decided against appellant.
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2016 (9) TMI 1011 - CESTAT MUMBAI
Evasion of customs duty - mis-declaration - natural marble blocks and slabs - artificial marble tiles and vitrified tiles - approach to settlement commission by few co-noticees and importer as per provisions of section 127B of Customs Act, 1962 - penalty proceedings dropped by settlement commission for these co-noticees - whether the immunity from penalty be available to the other co-noticees who did not approach the tribunal i.e., decision of tribunal be applied on other co-noticees? - Held that: - the decision in the case of SK Colombowala v. Commissioner of Customs (Import), Mumbai [2007 (7) TMI 514 - CESTAT, MUMBAI] is relied upon, where it was held that, the case against all co-noticees comes to an end once the order of settlement is passed in respect of the person entitled to file an application before the Settlement Commission and therefore, penalty imposed upon the appellants cannot be sustained and is set aside.
Appeal dismissed - decided against Revenue.
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2016 (9) TMI 1010 - CESTAT MUMBAI
Valuation - imported Mercedes Benz Car - enhancement of the value of the car due to accessories - purchase price - list price - car cover - optional item - Held that: - the manufacturer of car issued an invoice and a certificate indicating that the price at which the car was sold to the appellant was inclusive of cost of all accessories. The vehicle was purchased by the appellant in Dubai by paying an amount of Dirhams 83,100/- all inclusive. Since the certificate and the invoice issued by the appellant does not indicate any different amount charged for accessories, an error occured on adding value of accessories for determining the value for discharge of the Customs duty - appeal allowed - decided in favor of appellant.
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2016 (9) TMI 976 - CESTAT CHANDIGARH
Demand of differential duty - imposition of penalty - Declaration of consignments - Pressed Distillate Oil - Base Oil - chemical examination of the consignments - no clear statement by chemical examiner. Only indication that the samples have the characteristics of Base Oil - denial of Cross Examination of the chemical examiner before the Adjudicating Authority - principles of natural justice - Held that: - In the absence of conclusive evidence of mis-declarations, the Customs Authorities have gone with the declaration and finalized the assessments.
Valuation of imported goods - rejection of Declared value - Rule 12 (1) of Customs Valuation Rules, 2007, read with Section 14(1) of Customs Act - Held that: - The SPI classification for ‘base oil’ divides it into five groups based on three parameters.(i) Sulpher %(ii) Saturates %(III) Viscosity Index.
The chemical examiner has not indicated the first two characteristics, viz, sulphur % and saturates in his report. Reference has been made only to one of the three parameters mentioned in API. This limited approach to decide the mis-declaration is incorrect. At the most, the viscosity index may raise doubt in our minds that the imported goods may be base oil. However, to conclude that the imported goods were not PDO but ‘base oil’ and allege mis-declaration on the part of the importer only on the basis of the chemical examiner’s report on one out of three characteristics will not be correct - the mis-declaration in the imported goods have not been established. Consequently, there is no basis the disregard the declared value.
No valid reason to reject the classification or valuation of imported goods - demand of duty and imposition of penalty failed - consignments to be released immediately - appeal allowed - decided in favor of appellant.
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2016 (9) TMI 975 - CESTAT HYDERABAD
Imposition of penalty - Port Clearance Certificate - Charter Agents - Bagged Rice - extension of port clearance upto 07.02.2012 - surrender of original Port Clearance Certificate on 08.02.2012 - Section 42 of the Customs Act, 1962 - whether the penalty imposed for the reason that the vessel has left the port without Port Clearance Certificate as envisaged in Section 42 of the Act is justified? - Held that: - Section 42 states that no vessel can leave without written order given by the proper officer. It does not say that the original Port Clearance Certificate has to be in the hands of the master of the vessel while leaving the port though it may be necessary for the vessel to have the original port clearance certificate in case it is intercepted or for that matter for any other inspections.
Section 42 of the Act only says that the vessel shall not sail unless a written order is given by a proper officer. Perhaps the appellant, Steamer Agent was in possession of the Port Clearance Certificate and the Master of the ship had in possession only a photocopy of Port Clearance Certificate. Section 148 of the Act states that the principal/master of the vessel shall be liable for the acts or omissions committed by the agent and vice versa. At the time of sail of the vessel if the appellant who are Steamer Agents of the vessel were holding the Port Clearance Certificate, it cannot be said that there is violation of Section 42 if the vessel leaves the port during the validity of Port Clearance Certificate.
The department has issued Port Clearance Certificate which was valid till mid night of 07.02.2012. So also department does not have a case that the vessel sailed after mid night of 07.02.2012. Therefore, at the time of sail of the vessel from the port, there was a valid Port Clearance Certificate issued by the department.
Penalty imposed under section 42 of the Customs Act, 1962 is unsustainable - appeal allowed - decided in favor of appellant.
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2016 (9) TMI 974 - CESTAT HYDERABAD
Enhancement of value - demand of differential duty - import of second hand cannon copiers - examination of goods by department and SIIB - unauthorized import - prices of some of the models were found higher than the prices declared by importers - Held that: - proceeding sequentially through rules 5 to 8 of the Customs valuation Rules, 1988 to determine the value of the goods under reference is the correct methodology to be followed - no infirmity found in the assesseble value arrived.
Imposition of redemption fine under section 125 of the Custos Act, 1962 - Held that: - the appellant did not produce required license for importation rendering the import unauthorized and in violation of Sections 3(2) and 3 (3) of the F T(D& R) Act, 1992. The goods become liable to confiscation under section 111(d) of the Customs Act, 1962 - goods becoming liable to confiscation thereby option available to appellant to pay redemption fine in lieu of confiscation - imposition of redemption fine within ambit of law and also reasonable in quantum.
Imposition of penalty under section 112(a) of the Act also justified - appeal dismissed - decided against appellant.
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2016 (9) TMI 973 - CESTAT MUMBAI
Provisional release of confiscated goods - confiscation of consignment of rubber - option to redeem on payment of fine only for re-export within 90 days - imposition of penalties - classification of imported goods - under 27101960 as base oil - under 27079900 leviable to duty at 10% - waste product listed in Schedule III Part A of Hazardous Waste (Management, Handling and Trans-boundary Movement) Rules, 2008 - hazardous waste - Held that: - the imports of the appellants do contain a higher percentage of aromatic constituent than prescribed for classification under 2710. The alternate heading which describe the imported goods to be waste brings it under the ambit of Hazardous Waste (Management Handling & Trans Boundary Movement) Rules, 2008 Rules and therefore liable for action under section 111 and section 112 of Customs Act, 1962.
In relation to the goods imported earlier that had not been subject to testing at the time of import, it is not in dispute that, in the absence of such verification, it would be inequitable to consider those to be at par with imports lying uncleared. Refining of crude petroleum involves complicated processes and there may not be any ground to conceive that an output of the production process which is imported in the country for a specific industrial use would have uniform composition on each occasion.
Competence of CRCL to test the product - laboratory approved by the Ministry of Environment & Forests - Held that: - testing is for coverage under note 2 of Chapter 27 of First Schedule of Customs Tariff Act, 1975. It is following a re-classification on account of non-fitment with that note that the goods become subject to Rules governing handling of hazardous waste. The origin of confiscation resides in the domain of Customs procedures and hence reliance on testing by CRCL is not questionable - the samples subjected to a valid test - testing procedure should not be subject to cross-examination by the appellant as the credibility of the test is not in question and a non-expert may not be in a position to query an expert on technicalities. It was open to the appellants to produce expert witnesses on their side during the adjudication proceedings. No such request was canvassed on behalf of appellants.
The imported product subject to the provision of Hazardous Waste (Management Handling & Trans Boundary Movement) Rules, 2008 - appeal rejected - decided against appellant.
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2016 (9) TMI 931 - CESTAT MUMBAI
Valuation under section 14 of Customs Act, 1962 - inclusion of royalty payable to overseas entity in the assessable value - master tapes - rule 9 of Customs Valuation Rules, 1988 (or rule 10 of Customs Valuation Rules, 2007) - rejection of declared value under rule 10A of Customs Valuation (Determination of Price of Imported Goods) Rules, 1988 - transaction value - cost and services - Held that: - the case Collector of Customs (Preventive) v. Essar Gujarat Ltd [1996 (11) TMI 426 - SUPREME COURT OF INDIA] can be referred to, where the decision does not impact upon such imports which can draw a distinction between royalty on goods imported and royalty as a post-importation condition.
Of particular import are the propositions that mere existence of royalty clause in a contract which also covers import of goods does not, ipso facto, mandate adjustment of transaction value. The connection with imported goods must conform to the prescriptions in rule 9 of Customs Valuation Rules, 1988 (or rule 10 of Customs Valuation Rules, 2007). It is abundantly clear from the above narration that royalty is hinged upon post-importation manufacture and not on the imported goods per se. The impugned order has erred in including the royalty amounts in the valuation of the ‘master tapes’ that were imported.
Appeal allowed - decided against Revenue.
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