https://www.taxtmi.com/css/info/rss_sitemap/rss_feed.css?v=1746094055 https://www.taxtmi.com Business/Tax/Law/GST/India/Taxation/Policies/Legal/Corporate Tax/Personal Tax/Vat Law/Legal Information/Tax Information/Legal Services/Tax Services Tax Management India. Com / MS Knowledge Processing Pvt. Ltd. All rights reserved. One stop solution for Direct Taxes and Indirect Taxes https://www.taxtmi.com/caselaws?id=253295 https://www.taxtmi.com/caselaws?id=253295 Valuation - Suppression of value of goods - Inclusion of separate charge for design, engineering fee - Confiscation of goods - Redemption fine and penalty - Held that:- Appellants never concealed any fact from the Department and as soon as they were asked to furnish documents, they submitted all the documents such as contracts and detailed agreements, etc. when the documents were received, the department objected that design and engineering charges also should suffer duty and this was also paid by them with interest and it is the appellant s submission that appellant s did not even wait for all the clearances to take place even though the design and engineering charges were being paid in installments and not exactly lumpsum and when the duty was paid, the amount had not yet been paid in full to the supplier. advance amount received by the appellant was accepted as part of the consideration without any objection and without any hesitation and differential duty with interest was paid. Therefore, we find that in respect of advance amount received and duty paid, the imposition of penalty cannot be sustained. Accordingly, we set aside the penalty in respect of this alone. When contract produced for supply of basic design and engineering, drawings and supervision of erection, etc., one is as much a part and condition of the contract as the other and addition of these charges to the assessable value is sustainable - no segregation of supervision cost, local material cost, local engineering cost have been made. At the same time, there is also no indication that the design and engineering cost does not include the basic design and engineering, cost of the equipment supplied. Prima facie, we do not find any merit. In respect of design and engineering charges and technical supervision charges, we find that it is always a disputable item and requires interpretation of the agreement, application of valuation rules and unless there is evidence to show that such agreement was deliberately forged and was not part of the contract for supply of equipment or it was not declared at all and there was a considerable effort to hide the fact of payment of such charges, it may not be appropriate to impose penalty. In this case, from the second bill of entry, always the assessment was provisional and therefore on that ground also, it may not be appropriate to impose penalty. Therefore the penalty imposed on this basis is also set aside. When we have limited the whole case to confirmation of demand for duty and interest thereon, and set aside the penalties on all the counts, it would not be appropriate to uphold the confiscation of the goods and imposition of fine in lieu of penalty. Therefore, the redemption fine also has to be set aside and is set aside. When there is no penalty on the main appellant, there cannot be penalty on the employee also. Therefore, the penalty imposed on the employee who is the second appellant before us is also set aside. - Decided in favour of assessee. Case-Laws Customs Thu, 18 Sep 2014 00:00:00 +0530