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TMI Blog2014 (11) TMI 617X X X X Extracts X X X X X X X X Extracts X X X X ..... riginal or at the time of hearing? (c) Whether the Tribunal was correct in rejecting the application for rectification of mistake (relating to the issue at (ii) above) apparent on the face of its final order No.950/2005, dated 11.7.2005? (d) Whether the Tribunal can be heard to say that if the plea of the appellant regarding the provisional assessment is accepted, the demand will be barred by limitation and therefore, such a plea cannot be entertained? 2.1. The facts in a nutshell are as under: The appellant imported capital goods under Export Promotion Capital Goods (EPCG) Licence No.1232940, dated 16.5.1994. They cleared the capital goods vide 17 Bills of Entry, of which 13 consignments were cleared through Chennai Port and 4 consignments were cleared through Mumbai Port. The consignments at Mumbai were cleared against release advices issued by Chennai Customs by debiting the EPCG Licence registered at Chennai. The EPCG license comes with a corresponding export obligation, of which we are not concerned for the present. 2.2. The assessee entered into a technical collaboration agreement dated 6.3.1994 with M/s.Brazilian Food Project, Brazil. The Directorate of Revenue Intellige ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ingredients are collusion, suppression of facts and wilful mis-statement. If find in the instant case the firm M/s.CCL have remitted the know-how fees of US$ 2,88,000 with the approval of SIA and with the permission of Reserve Bank of India. Officials of Ministry of Finance also formed a committee approving such collaboration. Therefore, I hold that there is no suppression in the instant case. I also find that there is no collusion in the instant case nor the show cause notice had let in any evidence in this regard. 39. The importers have cleared the equipment under 17 Bills of Entry, 13 consignments were cleared through Chennai port and 4 consignments were cleared through Mumbai port. I find that the importers have not intimated to the Customs authority that they have a foreign collaboration agreement. They have also not indicated that an amount of US$ 2,88,000 was remitted as know-how fees to M/s.BFP, the foreign collaborators. When any payment is made, whether it is addable to assessable value or not, has to be decided by the Customs Department and importer cannot presume by themselves that the said amount is not includable in the assessable value and thereby not declaring the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... impose a penalty of Rs. 15,38,062/- (Rupees Fifteen lakhs thirty eight thousand and sixty two only) under Section 114A of the Customs Act, 1962. 43.3. I hold that the goods cleared are liable to confiscation under sec. 111(m) of the Customs Act, 1962 and as the goods are not available for confiscation, and as the importer has cleared at that stage against bond, I impose a redemption fine of Rs. 1,00,000/- (Rupees one lakh only) in lieu of the confiscability under sec.111(m) of the Customs Act, 1962, as the offence is limited only to the extent of know-how fees of US$ 1,30,000 and the importers fulfilled the whole export obligation. 43.4. In view of the specific provision under Section 114A which lays that when any penalty has been levied under Section 114A no penalty shall be levied under Section 112. Therefore I am refrained from invoking 112(a). 43.5. The above duty and penalty and fine shall be collected against Bill of Entry No.23810 dated 18.5.95, the last Bill of Entry cleared through Chennai Port. 2.6. Assailing the said order, the assessee filed an appeal to the Tribunal. On the issue of adding the technical know-how fee in the assessable value, the Tribunal held agai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which we have already examined is in support of Ld. Chief Commissioner's finding that the import of capital goods and acquisition of technical know-how by CCL from BFP constituted a single package. We have also found relation between the capital goods and the know-how fee. We have also noticed that M/s. CCL through their letter dated 2.3.2001 furnished a split-up of the know-how fee to the adjudicating authority showing the following parts as relatable to the erection of the plant and manufacture of Instant Coffee therein: (i) Detailed Drawings for erection of machineries, piping, power Distribution, instrumentation and utilities requirement. 50,000 USD (ii) Detailed design and drawing for manufacture in India of extractors, Spray drier tower and agglomeration accessories. 50,000 USD (iii) Providing a set of instructions and handbook for production, maintenance and quality control. 30,000 USD Ld. Chief Commissioner accepted these figures and held that know-how fee to the extent of US$ 1,30,000 was relatable to the capital goods in question. We are in agreement with this finding of the adjudicating authority. The first condition under Rule 9(1)(c) stood satisf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dgment while dealing with the case of Polar Marmo Agglomerates (supra) and observed as under: 'In CC (Prev.)Ahmedabad v. Essar Gujarat Ltd., the Supreme Court, interpreting the terms of the agreement took the view that fee payable for obtaining transfer of operational licence from a third party is to be added to the value of the plant purchased by Essar Gujarat from a foreign seller. It was found that without the licence from Midrex, Essar Gujarat will not be able to operate the plant in terms of the agreement of sale between Essar Gujarat and foreign seller M/s. Teviot Investment Ltd. It was therefore held that obtaining a licence from Midrex was a pre-condition of sale. The plant would be of no value if it could not be made functional. To make the plant operational licence and technical know-how had to be obtained. It was under these circumstances the Apex Court took the view that the fee for licence and know-how had to be added to the value of the plant imported." In the instant case, the Instant Coffee plant was erected in terms of the Technical Know-how Agreement. It was erected out of capital equipments imported from M/s BFP and those procured from other sources. M/s. B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . In other words, the issue involved is in regard to valuation of goods. The charge of deliberate suppression or misdeclaration of value cannot be pressed when the issue itself is debtable. We, therefore, hold that no suppression or misdeclaration is involved in this case. Consequently, the goods are not liable to confiscation nor the importers are liable to any penalty. We set aside the fine and penalty imported by the Chief Commissioner." A reading of the above portion of the impugned order would make it clear that, for the first time, the Tribunal has proceeded to hold that the assessment on the bills of entry is provisional in nature and, therefore, limitation does not arise. 2.8. Since a new finding of fact, which was not pleaded by the Department in the original proceedings, namely, the show cause notice or in the order of the Original Authority, was rendered by the Tribunal, the assessee has chosen to pursue the matter before this Court on the substantial questions of law, referred supra. 3. We have heard Mr.P.R.Renganath, learned counsel for the appellant and Mr.E.Vijay Anand, learned Standing Counsel appearing for the second respondent and perused the orders passed by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a moment, visualize a situation in which we hold the entire demand of duty as time-barred after accepting the relevant arguments of the assessee, regardless of the provisional nature or otherwise of the assessments. If, in fact, the assessments were provisional, such a view, if taken by us, would have been glaringly erroneous inasmuch as, where assessments are provisional, there is no question of limitation. It is, therefore, obvious that in a case which involves assessments of bills of entry and in which demand of duty is contested on limitation, it is open to the Tribunal to find out whether the assessments were provisional or not. Hence, we think, we have not committed any mistake in para 7 of our final order, let alone 'mistake apparent from the record'. In the result, the application gets dismissed." (emphasis supplied) 6. In the above factual matrix, it is apposite to refer to a decision of the Supreme Court in SACI Allied Products Ltd. v. Commissioner of Central Excise, Meerut, (2005) 7 SCC 159, in a case relating to excise, wherein the Supreme Court held that the Tribunal ought not to go beyond the show cause notice and the order of the Original Authority. In para ..... X X X X Extracts X X X X X X X X Extracts X X X X
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