TMI Blog2004 (6) TMI 80X X X X Extracts X X X X X X X X Extracts X X X X ..... cts and circumstances explained above, I order as follows :- (i) An amount of Rs. 31,03,66,083/- which was paid by M/s. ESSAR to M/s. LURGI Germany towards design and engineering charges including documentation, project handling, workshop tests, etc., shall be added to the assessable value and M/s. ESSAR shall pay appropriate differential duty on the above amount which comes out to Rs. 11,99,29,516/- as per working sheet enclosed together with accruing interest as applicable as per Section 47(2) of the Customs Act, 1962. (ii) In addition to above, M/s. ESSAR shall also pay appropriate duty on Rs. 28,05,29,374/- i.e. proportionate value of the goods to the extent of short fall in export obligation fulfilment which comes ou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rk etc. 3. The appellant's defence is three fold. First that they had fulfilled their export obligation and therefore there was no occasion to raise any duty demand for failure to complete the export. They have referred to the letter dated 8-5-2003 of DGFT informing the appellant that "they had fulfilled the entire export obligation against the said licence". The second, relating to valuation of the equipment is that it is settled law that customs authorities should accept the valuation of the imported goods as approved under the EPCG licence and they are not to carry out valuation of the capital goods on their own. Reliance is placed on the decision of this Tribunal in the case of Jindal Vijaynagar Steel Ltd. v. Commissioner of Customs, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reference to the value. In such a situation the Customs are not to value the goods imported under the licence invoking the provisions contained in Section 14 of the Act and those in the Valuation Rules. If such an action is taken it will defeat the policy underlying the EPCG scheme and the exemption notification. Customs authorities are not to take action defeating the policy enunciated by Government and notification issued pursuant thereto. 6. As stated earlier various parts of machinery satisfying the term 'capital goods'/components of capital goods, covered by Notification 111/95-Cus., dated 5-6-1995 were imported by the company under 19 Bills of Entry. Goods covered by these Bills of Entry were specifically enumerated in the annexure ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ner in valuing the goods in terms of Section 14 of the Customs Act, by loading value with the amounts covered by the other three contracts is justifiable or not. 8. Government of India evolved a policy as Export Promotion Capital Goods scheme. As per that scheme an applicant was entitled to get a licence on fulfilling the conditions mentioned in the scheme. One who obtains licence for import of capital goods under the scheme was to discharge certain export obligations depending on the value of the goods imported. In terms of that policy the company, Appellant before us, applied for licence. In the application he made known to the Departmental authorities all the contracts entered into between it and the foreign supplier. On proper verific ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been upheld by the Apex Court in Collector of Customs v. Reliance Industries Ltd., 2000 (115) E.L.T. 15. According to their Lordships if import was in terms of import licence, Customs authorities are not to interfere with the import. 9. Learned Counsel representing the Revenue, contended that Customs authorities are having final authority to decide on the question of valuation of the goods imported and in arriving at the value the amounts paid by the importer to the foreign supplier otherwise than under supply contract must also be reckoned. In support of this argument, he relied on the decision of the Apex Court in CC v. Essar Gujarat Ltd. - 1996 (88) E.L.T. 609 and Associated Cement Companies Ltd. v. Commissioner of Customs - 2001 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... romotion Capital Goods Scheme, an exporter gives bank guarantee for the export performance, to the DGFT. That guarantee is released only after the obligation is fulfilled. In these circumstances, it is grossly improper for other authorities to start investigation of the matter. Therefore, these proceedings were entirely misdirected. 7. In the view we have taken above, the appeal succeeds and is allowed after setting aside the impugned order. 8. Before parting with the case, we feel compelled to observe as to how unnecessary and vexatious this proceeding was. All for a concessional import duty, the appellant had to execute bank guarantee for several crores of Rupees with the Directorate General of Foreign Trade. This guarantee was kept ..... X X X X Extracts X X X X X X X X Extracts X X X X
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