TaxTMI 
TaxTMI 
2013 (8) TMI 777
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....the price of the cranes (in a disassembled condition) the importer had spent the following amounts for the purposes indicated against each: Sr. No. Expense To whom the payment was made Date of payment Amount paid in Rupees 1 Inspection charges NKK, Japan - 4,29,986/- 2. Discharging, installation & Commissioning, painting etc. ICAN Company Limited, Japan 30.08.2004 1,39,38,380/- 3. Provision of anchor end buffers, cable trenching etc. Dynamic Engineers & Erectors 21.4.2004 56,91,674/- 4. Unicab cables Uniflex 19.03.2004 19,78,645/- 5. WTGO38 D Shackle 10T SWL 63 grade, bottle screws, etc. Metro Ent 22.06.2004 1,92,500/- 6. Gear Oil etc. Helee Petro 25.08.2004 2,45,300/- 7. Installation labour charges etc. Urja Ent. - 1,34,505/- 8. Licence Fee - 9,27,715/- ....
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.... be added to the assessable value. 5. As regards the inspection charges, learned AR submitted that inspection charges were paid through the seller M/s. ICAN Company Limited (ICAN for short). GPPL had requested the inspection agency M/s. Nippon Kaiji Kentei Kyokai, Japan (NKKK for short) to inspect and examine the equipment mentioned in the proforma invoice with reference to the condition, residual life, reasonableness of the prices. Accordingly, the inspection was carried out and inspection certificate was issued prior to import of the goods. Inspection charges were paid by GPPL through M/s. AP Moller, who is also a party to the purchase agreement for import of three second hand rail mounted container cranes. Clause 1.5.2.1 of the contract between ICAN and GPPL discusses the inspection certificate. Since it is part of the contract, it is required to be added to the assessable value. The claim of the GPPL is that inspection was optional did not flow from the terms of the contract nor adding to enhance the value of the plant. Since the inspection was conducted to ascertain the reasonableness of the plant condition and residual life time, it is not to be included in the assessable ....
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....ty has to be paid on the same. 8. Learned advocate for the appellant submitted that cost of erection, commissioning and installation of the three cranes covered by the serial Nos. 2 to 8 of the table are post importation activities clearly separable under a distinct service contract and has no relationship whatsoever with the sale or purchase of the cranes by them. Post importation activities undertaken at the request of the GPPL by ICAN, are not undertaken as a condition of sale but an optional facility exercised by GPPL and accepted by ICAN. The purchase contract is for supply of three rail mounted cranes only and customs duty has been paid on full value of the contract. The assessment is complete as soon as the cranes were imported under the contract dated 27.11.2003 and the service contract is dated 30.11.2003 and GPPL had the option of getting the same work done by some company in India, in which case the question of addition of cost of erection, commissioning and installation to the assessable value would not have been arisen. 9. It was submitted that the Commissioner has relied upon the clause 12 of the contract which refers to completion of delivery of cranes upon imp....
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....s taken a view that since the crane was imported in dis-assembled condition, it can be said that the importer was restricted in using the crane since the crane could not have been used without assembling, erection and installation. Therefore, he has taken a view that in terms of clause (e) of sub-Rule 4 (2) of Valuation Rules, can be said that there was a restriction on the importer and therefore transaction value can be rejected. It was the submission of the appellant that notes to Rule 4 specifically provide that the value of imported goods shall not include the charges of construction, erection, assembly, maintenance etc. provided there are distinguished from the price actually paid or payable for the imported goods. 14. What emerges from the above analysis is that, unless erection, installation and commissioning is a condition of sale, the transaction value cannot be rejected and if it is not a condition of sale and if it can be distinguished from the price actually paid from the imported goods, such charges cannot be included. In our opinion, learned Commissioner has wrongly interpreted the provisions of Rule 4 to reject the transaction value on the ground that importation ....
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.... has been issued naming GPPL as consignee and acceptance of the risk by the under writers after the goods are duly sea fastened on the heavy lift vessel. This clause clearly shows that the title as well as the risk passes to GPPL as soon as the disassembled cranes are loaded safely on the vessel and insurance is obtained. Clause 6 provides for delivery date and identifies it as 01.6.2004. Clause-11 speaks of delay of failure of delivery and speaks of penalty to be paid by ICAN. According to this clause-11, (if due to material or default ICAN cannot deliver the cranes in compliance with clause-6, due to inconvenience caused by the ICAN, GPPL shall be entitled to refund of all payments made including an annual interest payable on the same. 18. So far as there is absolutely no doubt as regards the condition of the contract, delivery thereof, risk, title etc. It is clause-12 which speaks of acceptance of delivery which is the main source of dispute. According to this clause, delivery will be taken in accordance with this contract, when GPPL delivers to ICAN the completion certificates for all the three cranes. 19. Theoretically the second contract dated 30.11.2004 for erection, i....