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TMI Blog1992 (7) TMI 183X X X X Extracts X X X X X X X X Extracts X X X X ..... rmany who is hereafter called as foreign major supplier electrics. Schedule II of the agreement provides for the Payments Schedule. It is divided into two parts. The first part consists of Terms of Work and Payments to be made in respect of the Indigenous Electrical Equipments and Services to the Indian Supplier viz. Bharat Heavy Electricals Ltd. (B.H.E.L.). This part provides for various items of work to be carried out by B.H.E.L. and the amount to be paid to B.H.E.L., as against each item. The second part deals with the payments to be made to foreign major suppliers (electrics) viz. M/s. Siemens AG for the imported electrical equipments and services. The relevant items are as follows:- 2.2.1 Equipments, Commissioning Spares and Special Tools 13,659, 920 DM - 2.2.2 Engineering fees 15,185,240 DM - 2.2.3 Spare Parts for 2 years normal operation and maintenance of Plant on three shift basis 1,127,287 DM - 2.2.4 Insurance Spares 33,775 DM - Total 30,006,222 DM In other words, the payments to foreign major suppliers electrics M/s. Siemens AG consist of two elements:- (1) Payment towards equipment co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... correctness of the Order of the Collector is that it is the responsibility of Indian suppliers electrics i.e. Bharat Heavy Electricals Ltd. to render services as mentioned under "Scope of Work" in Schedule-I and the fees paid to the Indian Supplier Electrics is not included in the assessable value. M/s. Siemens AG, West Germany who are the foreign major suppliers electrics are in no way connected with the services mentioned under - "Scope of Work" in Schedule-I. Hence, the engineering fees amounting to DM 15,185,240 payable to M/s. Siemens AG by the petitioner is related to the equipment supplied by them and accordingly forms part of assessable value of the goods covered by Bills of Entry. 3. The next contention of the Department is M/s. Siemens AG is not the contractor in terms of Article 11 of the General Conditions of contract to supply lay out and schematic drawings of the plant. The engineering fees payable to them by M/s. Visakhapatnam Steel Project is towards sale of the equipment and hence forms part of value of the equipment. 4. It is next contended that as per Part 1.1, 1.4 under Schedule-I of the agreement"; dated 10-7-1987 M/s. Bharat Heavy Electricals Ltd. shall supp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctrics shall supply all the imported electrical equipments as specified in the contract specifications, on F.O.B. port of shipment basis according to INCO TERMS 1980 with latest revisions within the time stipulated in Schedule-3 para 3. 9. Schedule-2 deals with the contract price to foreign Major supplier electrics which we have already extracted in the above paragraphs. As pointed out in earlier paragraphs, as far as the payments to foreign major supplier electrics M/s. Siemens AG is concerned it consists of two parts. Part-I relates to the commissioning, spares and special tools, the other part deals with payments towards the engineering fees. 10. We may also refer to Anaexure XII which provides for the scope of engineering. Some item are as follows :- "Scope of Engineering The scope of engineering is to be read in conjunction with.article 11 of GCC. 1.0 Design & Engineering The basic and detailed design and engineering prepared specifically for complete etectrics of medium merchant and structural mill with their auxiliaries. 2.0 General Engineering and order handling. 2.1. Selection of size and layout of the plant, detailed planning for interaction of individual plant co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... towards engineering fees. Annexure XII provides for these scope of engineering work to be carried out by M/s. Siemens AG. The Schedule of payment categoricalTy mentions paymen|sTor equipment and services and payment for equipment is indicated separately and payments for engineering services is indicated separately. The engineering sercives are enumerated which means all engineering technical administrative services in the form of drawings, layouts, designing, data, manuals with reference to Medium Merchant and Structural Mills as covered under the contract. Since the contract itself specifically refers to the engineering services of the plant as indicated above, it cannot be said that the amount in dispute is paid for equipment imported. In this context, we may also refer to the billing schedule for the amount in dispute. The billing schedule refers to Article 11 of the agreement. It gives the description of drawings, documents, information supplied by the Siemens AG and it also provides the net bill value in DM. The total amount indicated is 15185240 DM. We may extract some of the items described under the description of drawings/docu- ments/information in the Billing Schedule :- ..... X X X X Extracts X X X X X X X X Extracts X X X X
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