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M/s. Hotel Leela Ventures Ltd. Versus Commissioner of Customs, Mumbai

2016 (12) TMI 320 - CESTAT MUMBAI

Levy of duty - drawings and designs - imported by the appellant for construction activity of various hotels - whether drawings and designs are goods so as to attract duty liability under customs act? - Held that: - The issue as to whether drawings and designs are goods or otherwise, is now settled by the apex court in ASSOCIATED CEMENT COMPANIES LTD. Versus CC [2001 (1) TMI 248 - Supreme court of India] wherein it has been held that drawings and designs are goods. Respectfully following the same .....

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nsation is for research and concept design, preparation of plan elevation, and furnace specification and preparation of loose furnishing specification. In our considered view, all these three items as mentioned in the contract would fall under the category of drawings and designs, hence the adjudicating authority was correct in holding that these amounts are to be considered as transaction value for discharge of customs duty - However, since in other orders, the adjudicating authority has given .....

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ct, clause of the scope of work is read; in all these contracts appellant had contracted for drawings and designs only j hence the plea of the Id. counsel that 1/3rd of the value of the contractual compensation should be considered for discharge of customs duty is not acceptable and the proposition is rejected. In our view, the adjudicating authority has been fair to extend 10% of the contracted compensation as abatement in respect of these contracts for arriving at the correct value for dischar .....

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llant with penalty is unwarranted. Accordingly, penalties imposed on the appellant are set aside. - We uphold the demand of the customs duty and the interest thereon as indicated herein above and set aside the penalties - appeal disposed off. - Appeal No. C/483 to 488/06 - Order No.A/93723-93728/16/CB - Dated:- 4-11-2016 - Shri M.V. Ravindran & Member (judicial) And Shri Raju, Member (Technical) Shri J.H. Motwani, Advocate with Shri C. Nandgopal Shri M.K. Sarangi, Jt. Comm.(AR) for the r .....

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lity does not arise while it is the case of the revenue that the agreement entered by the appellant with overseas designers indicates payment of an amount for the services towards drawings and designs. The adjudicating authority in ail these appeals in separate adjudication order has held that drawings and designs and goods and liable for levy of customs duty; gave a relief of reduction of 10% from the contract price and confirmed the demands raised with interest and also imposed penalties. Appe .....

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g authority is erroneous. He would take us through various contracts which are on which duty liability is demanded. It is his submission in respect of the contract in C/483/06, the adjudicating authority has given an abatement of US $35000 towards the inspection of the work and installation as per the agreement but he has not considered the reduction of abatement in respect of payments for preparation of loose furnishing specification. It is his submission that in other appeals the adjudicating .....

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erates the findings of the lower authorities. 6. On careful consideration of the submission made by both sides and perusal of the records, we find that the issue is regarding dutiability of the drawings and designs which were imported by the appellant for construction activity of various hotels. It is undisputed that during the relevant period the appellant had declared drawings and designs in the bill of entry but declared a nominal value of US $1 considering them as not goods. The issue as to .....

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perusing the contract came to a conclusion that the total consideration, compensation paid by the appellant to overseas party to US $3,45,000 needs to be reduced to $35,000 which was not in respect of drawings and designs, was for inspection and installation. We find this impugned compensation is for research and concept design, preparation of plan elevation, and furnace specification and preparation of loose furnishing specification. In our considered view, all these three items as mentioned in .....

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00 further 10% discount is to be granted to appellant and transaction value has to be arrived accordingly and the duty liability to be reworked out. 8. As regards Appeal no. C/484, 485, 486, 487 and 488/06, we find that in all these appeals the contract is for conceptual design, schematic design, design development for floor plan or elevation and design and specification for space planning and loose furnishing. The entire agreement talks about preparing drawings and designs for activity for hote .....

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