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TMI Blog1990 (3) TMI 192X X X X Extracts X X X X X X X X Extracts X X X X ..... 1962 as per its decision No. S/43-137/86 SVB dated 27-8-1981. This decision of S.V.B. accepting the invoice value under Section 14(l)(a) of Customs Act, 1962 was taken up for review. A search was conducted at their premises on 10-7-1985 and certain documents were seized. Based on these seized documents investigations were carried out and a tentative decision was served upon the respondent Company informing them of loading of invoice value of goods imported from Kodak Company by 60% under Rule 8 of Customs Valuation Rules, 1963. The respondents have replied to the above tentative decision inter alia denying all the allegations in the tentative decision and submitting that invoice value was the correct assessable value under Section 14(1) (a) of the Customs Act, 1962 and that there was no justification to load c.i.f./f.o.b. value on any Kodak Products imported by them. 3. The Assistant Collector, Special Valuation Branch, who adjudicated/reviewed the proceedings after considering their detailed replies and clarifications, although dropped several charges which were levelled in the tentative decision as not maintainable but still, however, he passed an order holding that the valuati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... price-lists upto date on micro-filming Unit. They are also promoting sales and advertising of Kodak products in India. This they are doing in the guise. "A Kodak Affiliated Company". They act as representative of Kodak in India and render so many services on behalf of Kodak. But for IPC's all these services would have to be rendered by Kodak themselves. Thus part of the expenses made by IPC for maintaining establishment rendering pre-import services, advertising, sales promotion are includible in the assessment value. The price-list available with IPC is only for India and is not the general price-lists for international use. These values are not values and do not include expenses made by IPC. IPC recovers these charges in the guise of service charges. These services charges which are nothing but pre-import services and therefore includible in the assessable value. 4. Aggreived by the Order No. S/43-130/80, dated 29-12-1986 passed by the Assistant Collector of Customs, Special Valuation Bench, the respondents filed an appeal before the Collector of Customs (Appeals), Bombay wherein he allowed the appeal by setting aside the order passed by the Assistant Collector as not sustainab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r East) Inc. Dubai and hence service rendered by the Respondent to the Indian buyers amounted to pre-importation services would have to be included in the assessable value. But neither Section 14(l)(a) prohibits such nexus as Section 14(l)(a) nowhere uses the words 'nexus' nor such service charges have anything to do with the foreign suppliers. The suppliers were not at all party to the agreement nor did the suppliers ever mention to the direct importers either in a communication or even on the proforma invoice that any service charges were payable by them to IPC. He said that these service charges were payable by Indian Porters in Indian Rupees to IPC for the benefit of porter and such charges were not to be included in the assessable value. He said that IPC was never appointed as agents of Kodak in India as accepted by the Assistant Collector in his order. Neither it acted as agent nor rendered any service on behalf of Kodak Suppliers. IPC are not maintaining their establishment for Kodak Suppliers or are not rendering any pre-importation services or sales promotion of Kodak products on behalf of Kodak Suppliers. The establishment expenses for advertising sales promotion etc. don ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orter like ONGC, ITDC and others who booked direct orders with foreign suppliers with no intervention of IPC and the prices charged to them were the same that were charged to IPC. He submitted that entire evidence of direct import by independent parties and copies of the invoices whose service charges were not charged in many cases were produced before the Assistant Collector and he drew our attention to the acknowledgement for having received and submitted that some samples of evidence were produced before the Collector of Appeals. He said that all the aspects have been dealt in detail by the Collector of Appeals and he rightly set aside the order of the Assistant Collector. 9. In rejoinder, Shri Sharma submitted that respondents acted as designated agent in India on behalf of Kodak and rendered the service as representative of the Kodak Company. He said that in view of contradictory finding about the aspect of Agency and evidence of direct imports were not considered by the Assistant Collector, he requested that matter may be remanded for fresh consideration. 10. We have given our anxious consideration to the arguments advanced on both the sides. We do not find any justificatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the goods are under-valued with sufficient evidence and then it may proceed to determine the value either as deemed value under Section 14(l)(a) of the Act or quantifying the value under best judgment assessment by resorting to Section 14(1)(b) of the Customs Act read with Custom Valuation Rules, 1963. 13. It is well settled principle of law that burden squarely lies on the Department to prove under-valuation. In the present case the Department has not discharged that burden. It has proceeded to determine the value on inferences without proving that goods are undervalued. In the absence of the mutuality of interest/and relationship between the importer and the foreign supplier, it is not just and reasonable to enhance the invoice value and to quantify the amount by resorting to Section 14(1)(b) of the Act without sufficient evidence in discarding the invoice value. There is no evidence to show that respondents acted as Agent to the foreign supplier and nowhere it was established that exporter would have incurred the expenses for the services which are being considered as pre-import service. Under these circumstances, the Department was not justified in ordering for loading the i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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