Assessable value excludes post-importation supervision charges under a separate contract for erection and commissioning.

Foreign supervision charges paid under a separate agreement for erection, testing, commissioning and training after importation were held not to form part of the assessable value of the imported plant and machinery. The services covered supervision in India for erection, quality checking, start-up activities, trial runs and commissioning, and were found to be distinct from the manufacture or supply of the equipment itself. Because the charges related to post-importation activities under an independent contractual arrangement, the customs valuation framework did not justify loading them into the value of the imported goods. The Revenue's appeals therefore failed.

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Issues: Whether 50% of the foreign supervision charges paid under a separate agreement for erection, testing, commissioning and training after importation of the plant and machinery were includible in the assessable value of the imported goods.

Analysis: The dispute turned on whether the impugned supervision charges were part of the price of the imported equipment or represented post-importation services. The factual finding recorded by the lower appellate authority was that the agreement covered supervision in India for erection, quality checking, start-up activities, trial runs and commissioning, and that these services were distinct from manufacture or supply of the equipment itself. The charge was, therefore, attributable to post-importation activities under a separate contractual arrangement. In these circumstances, the principle governing inclusion of consideration in assessable value under the customs valuation framework did not permit loading such charges into the value of the imported goods.

Conclusion: The supervision charges were not includible in the assessable value, and the Revenue's appeals failed.

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