Scope of remand in customs valuation bars levy based on findings made beyond the remitted issue.

A customs demand on a US$ 20 lakhs technical know-how fee was unsustainable because the adjudicating authority exceeded the scope of the remand. The remand had required a finding only on whether the relationship between the parties affected the price of the imported goods, but the authority instead made an addition under Rule 9(1)(c) of the Customs Valuation Rules, 1988. As the later appellate order had set aside the remand order and the Revenue had not challenged the relevant findings, there was no valid final determination to support the levy. The demand was therefore quashed.

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Issues: Whether the customs demand raised on the amount of US$ 20 lakhs paid as technical know-how fee was sustainable in view of the earlier appellate orders and the scope of the remand.

Analysis: The dispute turned on whether the adjudicating authority could travel beyond the issue remitted for decision and fasten duty on the technical know-how payment. The earlier remand required a finding on whether the relationship between the parties had influenced the price of the imported goods. Instead, the adjudicating authority made an addition of US$ 20 lakhs under Rule 9(1)(c) of the Customs Valuation Rules, 1988, which was outside the remand direction. The later appellate order setting aside the remand order and the absence of any challenge by the Revenue to the relevant findings meant that there was no basis to sustain the subsequent demand on that amount.

Conclusion: The demand of customs duty on the US$ 20 lakhs technical know-how payment was held to be unsustainable and was quashed, in favour of the assessee.

Ratio Decidendi: A demand cannot be sustained where it is founded on an adjudication made beyond the scope of the remand and without a valid final determination supporting the levy.

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