2015 (10) TMI 2572 - AT - Customs

Tribunal rules on royalty payments, allows provisional clearance

The Tribunal upheld the lower appellate authority's decision regarding the loading of royalty and lump sum payments on imported goods, leading to the ... EDD - loading of royalty amount and lump sum amount relating to imported goods paid or payable to the foreign supplier at the end of every financial year to be added to the transaction value - Held that: - this is the case of SVB finalisation of related parties transaction where DC(SVB) has finalised the relationship and also loading of royalty and lump sum payments on the invoice value and directed the assessing group to finalise the assessment accordingly. The appellant preferred the present appeal against the Commissioner (Appeals) order. We do not see any merit in the appellant’s plea as the Department is yet to finalize the provisional assessment and quantifying the demand on account of SVB order and there is no document or evidence to show the objection raised in not clearing the live bill of entry provisionally on payment of EDD etc. Hence, the applicants are free to take up the matter with the assessing group for finalising the assessment as per the SVB order and if any demand confirmed, which becomes a separate issue. We also direct the lower appellate authority to consider the appellant’s requests on the assessment of live Bills of Entry if any provisionally on deposit of EDD pending finalization of assets - application disposed off. Issues:1. Appeal against SVB order and loading of royalty and lump sum payments on imported goods.2. Provisional clearance of live consignments pending finalization of assessment.3. Pre-deposit towards differential amount and consideration by assessing group.4. Consideration of early hearing application due to large pendency of appeals.Analysis:1. The applicant filed a miscellaneous application against the Commissioner (Appeals) order, challenging the loading of royalty and lump sum payments on imported goods directed by the adjudicating authority as per the SVB matter. The lower appellate authority upheld the SVB order, leading to the non-clearance of live consignments due to pending payments from the previous year. The applicant had already deposited EDD and quantified the differential amount, but the assessment was not finalized, causing a delay in clearance. The Tribunal found no merit in the appellant's plea, allowing them to address the assessing group for finalizing the assessment as per the SVB order, with any confirmed demand treated as a separate issue.2. The AR contended that no demand existed, and no pre-deposit was made as per the amended provisions. However, after hearing both sides, the Tribunal noted the SVB finalization of related party transactions and the directive to finalize assessment based on royalty and lump sum payments. The Tribunal emphasized that the Department had yet to conclude provisional assessment and quantify the demand, allowing the appellant to engage with the assessing group for finalization. The lower appellate authority was directed to consider provisional clearance of live Bills of Entry on EDD deposit pending assessment finalization.3. The appellant's plea for provisional clearance of live consignments was grounded on the pre-deposit made towards the differential amount. The Tribunal acknowledged the deposit made and permitted the appellant to pursue finalizing the assessment with the assessing group. The Tribunal highlighted the need for the assessing group to confirm any demand, treating it as a separate issue from the pre-deposit made by the appellant.4. The Tribunal disposed of the miscellaneous application, citing the large pendency of appeals as a reason for not considering the early hearing application. The appellant's request for an early hearing was thus rejected due to the substantial backlog of appeals. The Tribunal emphasized the need for the assessing group to finalize the assessment as per the SVB order, allowing the appellant to address any confirmed demand separately.Conclusion:The Tribunal's judgment addressed the issues of appeal against the SVB order, provisional clearance of live consignments, pre-deposit towards the differential amount, and the consideration of an early hearing application. The appellant was directed to engage with the assessing group for finalizing the assessment as per the SVB order, with any confirmed demand treated as a separate issue. The Tribunal emphasized the need for the assessing group to conclude the assessment promptly to facilitate the clearance of live consignments.