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2016 (6) TMI 567 - SUPREME COURT

2016 (6) TMI 567 - SUPREME COURT - 2016 (335) E.L.T. 198 (SC) - Import of machines for chip placing - Under-valuation of machines - Demand of duty and confiscation of machines - appellant had made payment of US $ 1,03,000 towards the cost of these machines to M/s 'SMART' in December, 2004 when started earning profita - Held that:- it is clear from the observations of the CESTAT that the point was not urged before the Commissioner is palpably wrong. We may record that though no evidence is produc .....

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eals disposed of - Civil Appeal Nos. 4275-4277 of 2008 - Dated:- 11-4-2016 - A. K. Sikri And Rohinton Fali Nariman , JJ. For the Appellant : Mr. S. Ganesh, Sr.Adv. Ms. Vanita Bhargava, Adv. Mr. Ajay Bhargava, Adv. Mr. Jeevan B. Panda, Adv. Mr. Abhisaar Bairagi, Adv.for M/s. Khaitan & Co For the Respondent : Ms. Sunita Rani Singh, Adv. Mr. Rupesh Kumar, Adv. Mr. B. Krishna Prasad, Adv ORDER The appellant Company herein had imported two machines used for chip placing in the manufacture of memo .....

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urbished. A registered Chartered Engineer Shri H.V. Krishnaswamy valued the machines at $ 1,21,875. Detailed investigations were carried out. It was revealed that the appellants are manufacturing Memory Modules with the brand name SMART and Hynix . The technical know how and necessary equipment and training to the appellant was provided by M/s SMART. The capital goods required were also supplied to them free of cost. M/s SMART continued to remain the owners of the capital goods and the appellant .....

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ntry dated 20.11.2000, 20.12.2000 and 16.12.2003. According to the Department the value of the aforesaid machines were also declared less. On the basis of this investigation the department issued show cause notice as to why the demand of ₹ 22,278,742/- in respect of bill of entry dated 19.07.04 be not made and a proposal was also made for confiscation of these machines. So far as the earlier imports are concerned in the show cause notice re-assessment was proposed demanding the differentia .....

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read with Rule 8 of the Customs Valuation Rules., 1988 The order of confiscation was also passed and penalty was imposed as well. The appellants challenged this order by filing an appeal before the CESTAT. The CESTAT had affirmed the order and dismissed the appeal vide impugned judgment dated 15.4.2008. It is this judgment the veracity thereof is questioned by the appellant in the instant appeal. Various arguments are raised by the learned senior counsel appearing for the appellant but it is no .....

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of material that was produced before the Commissioner and, therefore, the Commissioner should have taken recourse to Rule 4 of the Transaction Valuation Rules. In support of this submission, the learned counsel has argued that there was no sale consideration given by the appellants to M/S 'SMART' at the time of import of these machines, there was a fair understanding between the parties that as soon as the appellant starts making profit it will pay the price of the said machines. Accordi .....

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s business was a major diversification and the noticee company wanted to have an option of returning the machines if the business did not pick up. Further the noticee company was a loss making company and did not have the funds to pay for the machines immediately. The capital goods are not the properties of M/s Smart. However, until the noticee pays for the machines M/s Smart wanted to have the flexibility of asking the noticee to return the same if eventually the noticee was unable to pay for t .....

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