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TMI Blog2017 (11) TMI 170X X X X Extracts X X X X X X X X Extracts X X X X ..... , Sl.No.164. On investigation, it appeared to department that declared values and classification were incorrect. Accordingly, proceedings were initiated by way of SCN dt. 18.08.2009, inter alia proposing enhancement of value to EURO 54,72,000 (CIF) classification of the goods under CTH 84178090 along with main equipment (MTPA Coke Oven with CDQ and Byproduct Plant), confiscation of the imported goods and imposition of penalty under Section 112 (a) of the Customs Act, 1962. On adjudication, vide an impugned order dt. 29.10.2009, the Commissioner confirmed the proposals in the notice, confiscated the goods, however allowed their release on payment of redemption fine of Rs. 70,00,000/- under Section 125 of the Customs Act, 1962. Penalty of Rs. 10,00,000/- was also imposed on the appellant under Section 112 (a) ibid. Hence Appeal No.C/554/2009. 4. In Appeal C/270/2009, the appellant had similarly imported goods declared as Design Engineering and Technical Documentation for 189M3 Sinter Plant vide Bill of Entry No.617838 dt. 23.05.08 goods were classified under CTH 49111090, claiming exemption under Notification No.21/2002-Cus. Sl.No.164. So also, vide Bill of Entry No.617835 dt. 23.05 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mposition of penalty under Section 112 (a) ibid on the appellant. In adjudication, Commissioner vide impugned order dt. 04.03.2010 confirmed proposals in the SCN and ordered confiscation of the goods as above, however allowed the redemption on payment of fine of Rs. 1,00,00,000/- under Section 125 ibid. Penalty of Rs. 50 lakhs was also imposed on the appellant. Hence C/271/2010. 6. Today, when the matter came up for hearing, on behalf of the appellant, Ld. Advocate Shri B.G. Chidananda URS submitted oral and written submissions which can be broadly summarized as under : (i) The department has proceeded on a premise that import of Technical and Engineering Documents is a precondition for the same equipment Sinter Plant and Blast Furnace etc. imported separately from the foreign supplier. (ii) Department has taken a view that supply of Design Engineering Drawings and Technical Documentations are conditional to same equipment. This premise is totally incorrect. (iii) On the other hand, Design Engineering Drawings and Technical Documents are required for installation of plant and machinery which is a post-import activity. (iv) In support of his argument, Ld. Advocate draws at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r Section 125 cannot be justified. There is also no justification for imposition of high quantum of penalty of Rs. 50 lakhs under Section 112 (a) of the Act. (x) Ld. Advocate also further submits that various higher courts have held that when the engineering, design and drawing documentations are related to post-import activity their value cannot be added to the assessable value of the imported plant and machinery. By implication, engineering design and drawings which have no reliance with the import but only are required for post-import activity cannot be classified along with main plant and machinery imported but will merit classification on their own premise. He relies upon the following case laws : 1. Gujarat Mineral Development Corpn. Ltd. Vs CCE Ahmedabad - 2000 (117) ELT 432 (Tribunal) 2. Gujarat Mineral Development Corpn. Ltd. v CCE Ahmedabad - 2005 (190) ELT 5 (SC) 3. CC New Delhi Vs Parasrampuria Synthetics Ltd. - 2001 (133) ELT 9 (SC) 4. CC (Port), Kolkata Vs J.K. Corporation Ltd. - 2007 (208) ELT 485 (SC) 5. CC Vs Ferodo India Pvt. Ltd. - 2008 (224) ELT 23 (SC) 6. CC (General) New Delhi Vs Gujarat Perstorp Electronics Ltd. - 2005 (186) ELT 532 (SC) 7. CC ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... concerned plant and equipment / machinery earlier imported like Sinter plant, Blast Furnace, the said goods will be classified under the same classification of the main equipments, and rates of duty will be applicable accordingly. 8. Heard both sides and have gone through the facts. In all these three appeals, the core issues that come up for appellate decision are as under : (i) Whether the import of impugned goods is a pre-condition / intrinsic part of the total importation of the main plant and machinery or whether the goods can be considered as having been imported for subsequent post-import activity. (ii) Whether "Engineering Design and Technical Documentation" imported can be classified under Chapter 49 of CTH as claimed by the appellant or whether they are required to be classified along with the main plant and machinery and equipments imported for the project. 9.1 On the issue of enhancement of declared values, from the copy of the agreement available before us, it emerges that the agreement involves purchase of complete design, equipments, systems, technical services and training for Coke Oven plant and by-product plant project. The main outline of the agreement in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... activity but are indispensible condition to the import of the main plant and equipment/machinery. This being so, the case laws cited by the ld. Advocate will not help his case. 9.5 In fact, case law of Gujarat Mineral Development Corpn.Ltd. - 2000 (190) ELT 5 (SC) will go against the appellant since the Hon'ble Apex Court held therein that charges going as input into manufacture, which is the fact in these appeals, will be includible in the assessable value. 9.6 The ratio laid down by the Hon'ble Apex Court in Ferodo India Pvt. Ltd. - 2008 (224) ELT 23 (SC), also cited by ld. Advocate, will not help their case since the Hon'ble Apex Court has categorically held therein that technical know how cost and payment of royalty is includible in price of imported goods if such payment constitutes a condition pre-requisite for supply of imported gods by foreign supplier, which ostensibly is the case herein. 9.7 The reliance of the Ld. Advocate on the ratio of the Hon'ble Supreme Court's judgment in Tata Iron & Steel Co. Ltd. Vs CCE Bhubaneshwar - 2000 (116) ELT 422 (SC) is also misconceived since therein the disputed charges (technical know-how) were covered by a sepa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for confiscation. When imported goods have been evidently found as not corresponding in respect of value, hence their confiscation under Section 111 (m) is ordinarily very permissible. There is also no bar for imposition of redemption fine under Section 125 if there is no duty liability has been determined. Section 125 ibid provides for giving the owner of the goods an option to pay in lieu of confiscation such fine as the adjudicating officer thinks fit. The only proviso is that such fine shall not exceed the market price of the goods confiscated less in the case of imported good the duty chargeable thereon. 10.2 Accordingly, in respect of Appeal No.C/554/2009 (impugned order 803/2009 dt. 29.10.2009) the goods have been confiscated under Section 111 (m) of the Act. However, the importers have been given option to redeem the same for re-export on payment of fine of Rs. 70,00,000/- under Section 125 of the Act. Taking into all the facts of the matter into consideration, we order reduction of redemption fine to Rs. 10,00,000/- (Rupees ten lakhs only). So ordered. 10.3 In Appeal C/270/2010 (impugned order No.137/2010 dt. 27.2.2010), the impugned goods have been confiscated under Sec ..... X X X X Extracts X X X X X X X X Extracts X X X X
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