TaxTMI 
TaxTMI 
TaxTMI 
2011 (4) TMI 909
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.....2007 and (2) Technology Agreement dated 15.11.2007. Under the Technology Agreement, the foreign company provided licences to the JVC for the manufacture, in India, of stainless steel wires (hereinafter referred to as the licensed product). They also transferred technical knowledge including patent rights to the JVC to enable them to manufacture the licensed product, to maintain the machinery and equipment used for such manufacture etc. They also agreed to provide adequate training on the subject of technology to the employees of the JVC, for which the JVC would pay the expenses. In consideration of the licences granted to the JVC by the foreign company, the former was required to pay to the latter running royalties @ 1% of the net sales value of the licensed product manufactured and sold in India. However, no royalties were required to be paid during the calendar years 2008, 2009 and 2010. The agreement also contained provisions for quantification of the running royalty to be paid by the JVC. As per the Engineering Services Agreement, Bekaert should provide the following services to the JVC (appellant): (i) Design consulting services for buildings, infrastructure and suppo....
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....uty based on the above enhancement of value. All pending provisional assessments were also directed to be finalised accordingly. 3. Aggrieved by the Joint Commissioner s order, the appellant preferred an appeal to the Commissioner of Customs (Appeals) but the latter did not interfere with the order-in-original. The appeal filed by the assessee thus came to be dismissed on merits. The appeal is directed against the appellant Commissioner s order. There are two applications before us, one for stay of operation of the impugned order and the other for out-of-turn hearing of the stay application. As the stay application itself comes up before us for hearing, the other application is dismissed as infructuous. After hearing both sides on the stay application, we are of the view that the appeal itself is fit for summary disposal. Accordingly, after staying the operation of the appellate Commissioner s order, we proceed to dispose of the appeal. 4. The learned counsel for the appellant submits that both the orders, one by the Joint Commissioner of Customs and the other by the Commissioner (Appeals), were passed in violation of the principles of natural justice. It is submitt....
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....issioner (Appeals) required the appellant to submit an independent Accountant s report on the applicability of Bekaert s Transfer Pricing Policy to the goods imported by the appellant from Bekaert. It is submitted that, accordingly, the appellant furnished, under cover of letter dated 4.5.2010, to the appellate authority a report from PricewaterhouseCoopers (PWC), independent Tax Consultants. The learned counsel has invited our attention to relevant paragraphs of the said report. It is submitted that PWC randomly selected two of the invoices under which the appellant had imported machines from Bekaert, and analysed the significance of the entries contained therein. The focus of the learned counsel is on the operative part of PWC s report, wherein it was reported to the effect that the transfer price was equal to the price mentioned in the invoice. The structure of the intercompany transfer price was also elucidated in the operative part of PWC s report. Accordingly, the internal costs and external costs were estimated and the sum of the two was then increased with a 20% mark-up to arrive at the intercompany transfer price. The cost of goods sold was then estimated from material cos....
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....ellant from Bekaert, under Rule 10 of the Customs Valuation Rules, 2007. The learned counsel has also referred to the relevant provisions of Rule 10 ibid. It is his submission that neither the amount paid by the appellant to Bekaert under the Technology Agreement nor the one paid under the other agreement had any relation to the imported goods and that such payments cannot be said to have been made, directly or indirectly, as a condition of the sale of the goods under assessment. It is submitted that these material aspects were not considered by the learned Commissioner (Appeals) in the correct perspective with reference to the provisions of Rule 10 ibid. According to the learned counsel, the impugned order is vitiated by non-application of mind and is liable to be set aside. 6. In the context of assailing the Joint Commissioner s order, the learned counsel has made a reference to Rule 12 of the Customs Valuation Rules, 2007. It is submitted that, if the assessing authority had any reason to doubt the truth or accuracy of the declared value, he should have required the importer under Rule 12 to furnish further information and produce evidence in support of the declared valu....
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....the original authority was not addressed, nor redressed, by the appellate authority. On the merits of the case, the learned Commissioner (Appeals), without considering the submissions of the assessee, chose to interpret the provisions of the agreements in his own way and to uphold the order-in-original. The learned counsel has invited our attention to a factual incorrect finding contained in the impugned order. The relevant finding reads thus .., it is found that no machinery is procured independently of the related supplier . The learned counsel has submitted that machines worth Rs.1798 lakhs were imported by the appellant from Bekaert and that machines worth Rs.3360 lakhs were imported from others. However, the counsel fairly concedes that these figures were not presented before the lower authorities. If the figures presented by the learned counsel are correct, the above finding recorded by the learned Commissioner (Appeals) cannot be sustained. In the context of applying Rule 10 of the Customs Valuation Rules, 2007 to the goods imported by the appellant, the learned Commissioner (Appeals) observed thus: Regarding the other aspect of condition of sale, nowhere it is categorically....