TaxTMI 
TaxTMI 
2015 (9) TMI 317
X X X X Extracts X X X X
X X X X Extracts X X X X
....the period January & February, 2006 was dropped. (iii) It was held that the rate of duty from 01.03.2006 to 28.02.2007 was @ 8.16% and not 8.24% and consequently the differential demand on account of higher rate of duty amounting to Rs. 52,05,030/- was also dropped. (iv) Forty nine consignments seized vide panchnama dated 15.01.2006 at NCT, IGI Airport Complex, New Delhi valued at Rs. 17,78,90,832/- (Rs.17,21,44,516 + Rs. 57,46,316/-) were confiscated under Section 111(m) of the Customs Act, 1962 for mis-declaration of value and allowed to be redeemed on payment of redemption fine of Rs. 17,78,90,832/-. The bond and bank guarantee filed for release thereof were ordered to be appropriated for that purpose. (v) Differential customs duty amounting to Rs. 88,05,384/- (Rs.79,43,437 + Rs. 8,61,947) was ordered to be recovered on account of licence fee paid/payable to M/s. Oracle Corporation on the confiscated goods. (vi) Under Section 28 ibid, customs duty amounting to Rs. 1,27,35,26,395/-, out of the total demand of Rs. 1,34,70,14,053/- on the clearance of goods made during the period March, 2006 to December, 2007 was ordered to be recovered. All such goods cleared involving....
X X X X Extracts X X X X
X X X X Extracts X X X X
....had deliberately mis-stated/suppressed the facts and passed the adjudication order demanding the duty and imposing fines and penalties as above. 3. The ld. advocate for OIPL made the following submissions:- 3.1 Oracle, USA develops software and entered into a Software Duplication and Distribution Agreement dated 01.06.2003 (hereinafter referred to as the SDDA ) with OIPL whereby the latter was granted the right to duplicate and distribute Oracle software in India. 3.2 OIPL provides software licences to customers in India on payment of a licence fee for granting right to use the software. During the relevant period, out of the actual receipt of licence fee from the customers in India, OIPL remitted 56% thereof to Oracle Corp., USA. 3.3 OIPL also provides Annual Technical Support (hereinafter referred to as ATS ) services in India wherein OIPL provides version updates and technical assistance to the customers. OIPL charged 22% of the license fee (15% for version updates and 7% for technical assistance respectively) for providing the ATS services. The demand in the present case pertains to the basic license fee and the version update fee (i.e. 15% of license fee), whether ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....license certificate or a certificate of authenticity , is supplied in the following cases: (i) EPD +; (ii) EPD; (iii) Existing customers seeking to increase the number of authorised users/licences. Oracle Ireland used to print the licence certificates (Dox) and supply the same to OIPL for ultimate delivery to the customers in India. The present demand on Dox relates to category (ii) & (iii). Differential duty under category (i) imports is demanded under media pack category. 56% of the royalty/license fee collected from customers was remitted to Oracle Corp., USA. Version Updates Version Updates are part of the ATS offered by OIPL. Version updates assisted the customer with bug fixes, patches, version and other technical support. Physical import of media pack occurred only when a customer opted for the same. 56% of the royalty/license fee collected from customers was remitted to Oracle Corp., USA. Global Deals These transactions are part of global contracts between overseas Oracle entities and multi-national companies. OIPL received a share of the global deal based on the amount of users in India. 56% of this amount was remitted to Oracle Corp., USA. No physical im....
X X X X Extracts X X X X
X X X X Extracts X X X X
....itional amounts to the dutiable value of the imported media packs. The additional amounts relate to transactions and can broadly be categorized into three buckets. The first bucket consists of shipments for which there was a physical import and there was a royalty paid (e.g., license sales and version updates with media pack shipments). Although there was a royalty actually paid with respect to this category, it was not a condition of the sale of the media packs. Instead, the license is a condition of the use of the software. In this bucket, the differential duty demand confirmed by the Ld. Commissioner amounts to Rs. 18,58,24,382/- out of a total demand of Rs. 128,23,31,779/-. The second bucket consists of shipments for which no royalties were due (e.g., replacement media packs for defective/damaged shipments and media packs provided to increase awareness of Oracle products in certain sectors). Given that there is no royalty paid or payable with respect to these transactions, there is nothing to be added to the dutiable value but Revenue has added notional licence fee payable to Oracle USA. This bucket accounts for Rs. 87,69,94,155/- out of the total demand of Rs. 128,23,31,....
X X X X Extracts X X X X
X X X X Extracts X X X X
....racle Ireland. As a matter of fact, at present, OIPL delivers software to its customers only through electronic means (i.e., no physical delivery option is given). As a result, there are no media pack imports. Even then OIPL continues to charge licence fee from the customers and in turn remit licence fee to Oracle Corp., USA. Even in EPD + mode of supply, wherein the customer opts for media pack, the order confirmation categorically provides that licence fee is payable by the customer to OIPL even if the media pack is not delivered. OIPL is free to distribute the media pack imported from Oracle Ireland to either a commercial or non-commercial customer. If the media pack is distributed to a non-commercial customer after importation, OIPL will not pay any licence fee to Oracle Corp., USA. Even if the media pack is distributed to a commercial customer after importation and OIPL defaults in remitting licence fee (56%) to Oracle Corp. USA, the contract of sale of media pack between OIPL and Oracle Ireland will not get repudiated. In fact, Oracle Ireland would continue to sell the media pack to OIPL as long as it receives the price charged for such media pack. Advisory opinio....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... of each and every Oracle software offered to customers by Oracle Corp., USA at a given point of time (regardless of whether such Oracle software was actually contained in the media pack provided to the non-commercial users) to arrive at a license value for the non-commercial transactions. Such notional licence value worked out for non-commercial transactions is exponentially higher than the actual licence fee charged for any commercial transaction. The amount arrived at with respect to the Free of Charge External shipments double counts the notional license fee as these notional royalties are already taken into account with respect to the original media pack shipment. The license provided to the commercial users is a perpetual license but the license provided to the non-commercial users is yearly. Thus, these two transactions are not comparable and value of one cannot be adopted for another. Reliance is placed on the case of Selected Creations vs. CC, 2001 (135) ELT 333 (Tri.-Delhi). 3.12 Customs duty cannot be levied on electronic download of software [Refer Digital Equipments India Limited vs. CC Bangalore, 2001 (135) ELT 962 (T) and the Geneva Ministerial Declaration o....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nfirmed duty demand. Despite the fact that no licence fee was remitted to Oracle Corp., USA by OIPL, the impugned order has confirmed the duty demand for non-commercial transactions on the basis of royalty/licence fee that should have been paid. The Ld. Commissioner has on its own volition, rejected the transaction value of USD 500 charged by OIPL under OPN WDP and OAI programme as annual registration fee . OIPL never declared the said value as the transaction value. At the time of importation, the price charged by Oracle Ireland for supply of media pack was declared as the transaction value . The Ld. Commissioner has not given any reasons whatsoever to discard the same. The Ld. Commissioner has not bothered to factually determine the software actually supplied in non-commercial transactions. The value has been re-determined on the basis of value of single user licence (global list price without any discounts) for all the software which could have been provided by OIPL. FOC supplies: In the case of commercial transactions, the Ld. Commissioner has taken the list price and not the discounted price for the purposes of determining the duty liability. In the case of non-com....
X X X X Extracts X X X X
X X X X Extracts X X X X
....racle Corp., USA. OIPL also submitted a copy of the SDDA (in terms of which royalty is to be remitted) along with the SVB submissions. This shows that the allegation regarding non-disclosure of information pertaining to royalty remittance is totally misconceived and factually incorrect. Therefore, extended period of limitation under proviso to Section 28 of the Customs Act cannot be invoked in the present case. PENALTY NOT IMPOSABLE AND INTEREST NOT RECOVERABLE FOR SHORT-PAYMENT OF CVD. 3.18 The entire demand pertains to non-payment/short-payment of CVD levied under Section 3(1) of the Customs Tariff Act, 1975 whereas the provisions for levy of penalty and interest are prescribed under the Customs Act, 1962. Therefore, penalty and interest cannot be levied for non-payment of CVD unless the penalty and interest provisions prescribed under the Customs Act, 1962 are borrowed under Section 3 of the Customs Tariff Act, 1975. Reliance is placed on the case of Tonira Pharma Ltd. vs. CCE, Surat, 2007 (208) ELT 38. (Page 152, Compilation of Cases and Materials) The principle that penalty cannot be levied in the absence of penalty provisions being borrowed in a particular enactment ....
X X X X Extracts X X X X
X X X X Extracts X X X X
..... Only 49 consignments valued at Rs. 17,78,90,832/- were seized and provisionally released under Provisional Duty Bond and Bank Guarantee. The rest of the goods were never seized and no bond or bank guarantee has been provided with respect to these goods. With respect to the goods that were not seized, the confiscation and the redemption fine imposed is not sustainable. Confiscation cannot be done if the goods are not available as has been held in the following cases:- (i) CCE vs. Raja Impex, 2008 (209) ELT 185 (P&H); and (ii) Shiv Kripa Ispat Pvt. Ltd. vs. Commissioner of Central Excise, 2009 (235) E.L.T. 623 (Tri. - LB). Order for confiscation of the goods is beyond the scope of the Show Cause Notice as the Show Cause Notice did not propose to confiscate the goods imported during the relevant period (other than the seized goods). Departmental s Submissions 4. Ld. Departmental Representative, on the other hand made the following submissions during the hearing and also in the Written Submissions given on 02.06.2015:- (i) It is an admitted fact that OIPL, M/s. Oracle EMEA, Dublin, Ireland and M/s. Oracle International Corporation, USA (also referred to as Oracle....
X X X X Extracts X X X X
X X X X Extracts X X X X
....dly goods that is imported into India. The software always remains on a media, including a server, a hard drive of a computer or a CD on any of which it can be accessed. The CD or the internet makes no difference to the software being goods under Section 2 (22) of the Customs Act, 1962 since software is moveable property . (x) Software being goods was exigible to Excise duty on being developed or manufactured in India. Rule 4 of the Customs Valuation Rules, 2007 stipulates that the value of imported goods shall be the transaction value, i.e. the price actually paid or payable for the imported goods. The Rule further states that the transaction value declared by the importer at the place of importation would be acceptable if the buyer or seller are not related or where the buyer and seller are related, the transaction value is not influenced by their relationship. (xi) In the present case, OIPL and Oracle, Ireland are related. OIPL is a wholly owned subsidiary of OIC, USA (owner of the software) and similarly, Oracle, Ireland is also a subsidiary of the OIC, USA. The Master Services Agreement governs the business relationship among members of the Oracle Group. OIPL and Oracle ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ument from Oracle, Ireland contained details of ultimate individual buyers in India including their names, Indian address, Delivery Order No., date of booking, Unique Order No., date of shipping, P.O. No. and interestingly also the description of the goods and their value in Indian Rupee for Octroi purposes. Being part of the Oracle Group and governed by the Master Services Agreement , Oracle Ireland was indirectly controlling the operations undertaken in India by M/s OIPL by issuing documents from Ireland which ordinarily were to be issued from OIPL s office in India. Investigations further revealed that OIPL did not declare that the goods were being imported from a related seller so that the declared transaction values are accepted and not rejected by Indian Customs authorities. The importer did not tell anything about the Master Services Agreement. M/s OIPL also did not declare that 56% of the royalty fees negotiated with Indian Customers in advance of the actual import into India was to be paid to OIC, U.S.A (the parent company). Being a condition of import of the software agreed in advance of its actual import, the licence fee was a part of the transaction value of the importe....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ware. OIPL would be the legal importer of the CD (media) pack to be delivered to a Customer with whom the price and terms and conditions were negotiated in advance. (xx) Also, at the same time, Oracle s financial software application being fully integrated with the Distribution and Order Management Application, the Accounts Receivable data for the OIPL s Indian customer would be updated in real time when the media packs were actually shipped from Ireland. (xxi) OIPL knowingly suppressed the information relating to true value of goods in question. (xxii) OIPL at the initial stages of the investigation took a plea that the imported software (media pack) were imported for stock and sale and their sale price was not available with them. However, later it was gathered by the department that the importer i.e. OIPL switched the invoices at DHL s Distribution Centre in Gurgaon and attached the invoice (along with the consignments) to be sent to OIPL s Indian Customer with the true and correct value (including licence fee) before delivery to the ultimate Indian customers. (xxiii) OIPL, knowingly suppressed the information relating to the actual valuation of the goods by never di....
X X X X Extracts X X X X
X X X X Extracts X X X X
....er and not between OIPL and the Indian customer. (iv) Annual fee charged ranging from USD 500 to USD 1995 was not a correct transaction value. This transaction value has to be rejected on the ground that several restrictions were imposed on the users of the software who paid annual fee ranging from USD 500 to USD 1995. Wherever software is supplied to non-commercial customer under Section 14 of the Customs Act, 1962 and the Customs Valuation Rules, 2007 assessable value for imported goods is to be determined on the basis of identical goods under Rule 4 of the 2007 Rules. In the present case, the identical goods for determining value are the commercial supply of the same software (identical goods) imported from outside India by OIPL. (v) OIPL did not disclose its true relationship with Oracle Ireland as members of the Oracle group until the department undertook its investigations against OIPL. Penalty was therefore rightly imposable as proposed in the Show Cause Notice. 6. The appellants made the following further submissions in response to the contentions put-forth by the Revenue:- (i) Royalty payments are for the right to distribute or use the copy right software in In....
X X X X Extracts X X X X
X X X X Extracts X X X X
....icence fee paid by OIPL to its parent company Oracle USA in respect of the software so downloaded is includible in the assessable value. (iii) Whether in respect of the electronic software imported in the form of media packs or downloaded electronically in respect of which no licence fee was paid or required to be paid by OIPL to Oracle USA, the value of the (notional) licence fee can be included in the assessable value on the ground that same should have been paid and whether the licence fee neither paid nor required to be paid by OIPL to Oracle USA can be held to be payable in the given circumstances. (iv) Whether the extended period of limitation is invokable in the given facts and circumstances of the case and whether the whole or part of the demand is hit by time bar. (v) Whether provisions of Customs Act, 1962 with regard to confiscation, interest and penalties are applicable in relation to the impugned CVD. (vi) Whether the value of software on which service tax has been charged can be included in the assessable value of media packs imported for the purpose of assessment under Customs Act, 1962. (vii) Whether redemption fine can be imposed in respect of goods ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....reproduced below:- "14. Valuation of goods (1) For the purposes of the Customs Tariff Act, 1975 (51 of 1975), or any other law for the time being in force, the value of the imported goods and export goods shall be the transaction value of such goods, that is to say, the price actually paid or payable for the goods when sold for export to India for delivery at the time and place of importation, or as the case may be, for export from India for delivery at the time and place of exportation, where the buyer and seller of the goods are not related and price is the sole consideration for the sale subject to such other conditions as may be specified in the rules made in this behalf : Provided that such transaction value in the case of imported goods shall include, in addition to the price as aforesaid, any amount paid or payable for costs and services, including commissions and brokerage, engineering, design work, royalties and licence fees, costs of transportation to the place of importation, insurance, loading, unloading and handling charges to the extent and in the manner specified in the rules Made in this behalf" Thus, it is evident that the provisions for adding....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ied the software without charging any licence fee. Thus no licence fee was due or paid or remained unpaid by Indian customers to OIPL and by OIPL to Oracle USA in respect of such transactions. Even if it was argued for the sake of argument that the parent company may not care to collect all the licence fees from its subsidiary company as both are related but even in that scenario the parent company or the subsidiary company would certainly collect the licence fee from the customers (which are not related) in case such licence fee was indeed required to be paid by them (i.e., customers) in respect of such transactions. It thus clearly comes out that the licence fee in respect of non-commercial transactions , i.e., the transactions in respect of which the customers were not required to pay directly or indirectly, any licence fee and where it (i.e., licence fee) was neither collected nor was it due from the customers can be categorised as payable for the purpose of adding to the assessable value. Indeed , it is clearly stated in para 5 of the Software Duplication and Distribution Licence Agreement between Oracle USA and OPIL that Royalty/sub-licence fee shall not accrue on licences pu....
X X X X Extracts X X X X
X X X X Extracts X X X X
....l types of movable properties, whether those properties be tangible or intangible. We are in complete agreement with the observations made by this Court in Associated Cement Companies Ltd. (supra). A software programme may consist of various commands which enable the computer to perform a designated task. The copyright in that programme may remain with the originator of the programme. But the moment copies are made and marketed, it becomes goods, which are susceptible to sales tax. Even intellectual property, once it is put on to a media, whether it be in the form of books or canvas (in case of painting) or computer discs or cassettes, and marketed would become goods . We see no difference between a sale of a software programme on a CD/floppy disc from a sale of music on a cassette/CD or a sale of a film on a video cassette/CD. In all such cases, the intellectual property has been incorporated on a media for purposes of transfer. Sale is not just of the media which by itself has very little value. The software and the media cannot be split up. What the buyer purchases and pays for is not the disc or the CD. As in the case of paintings or books or music or films the buyer is purchas....
X X X X Extracts X X X X
X X X X Extracts X X X X
....er, in case of electronic downloads of software, it has not been ascertained whether server from where it was downloaded was actually located abroad. Even presuming it to be so, we need to see whether mechanism exists to levy and collect customs duty on such downloads. The Customs Act, 1962 contains several provisions for operationalising the levy and collection of customs duty. For example for the date for determination of rate of duty and tariff valuation of imported goods, Section 15 provides that in case of goods entered for home consumption under Section 46, it will the date on which Bill of Entry for such goods is presented. As per Section 7, CBEC appoints ports and airports which alone shall be customs ports and airports for loading and unloading of goods. Section 8 provides for approval of proper places in any customs ports, airports for loading or unloading of goods and for specifying the limits of any customs area. Section 31 provides that imported goods are not to be unloaded from any vessel unless entry inward is granted. Section 32 provides that no imported goods can be unloaded unless they are mentioned in the import manifest or import report. Section 33 provides for ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....fee paid or required to be paid can be added to the assessable value only if it is paid or required to be paid as a condition of sale. Various judgements and rulings including rulings of U.S. Customs referred to by the ld. Departmental Representative are also to the effect that only if licence fee/royalty payment is a condition of sale of the imported goods, such licence fee/royalties are includible. While discussing a situation only somewhat similar, U.S. Customs in its Ruling HQ W548692 of March 2, 2007, inter alia observed as under:- "For example, if the buyer pays a third party for the right to use, in the United States, a trademark or copyright relating to the imported merchandise, and such payment was not a condition of the sale of the merchandise for exportation to the United States, such payment will not be added to the price actually paid or payable. However, if such payment was made by the buyer as a condition of sale of the merchandise for exportation to the United States, an addition will be made. As a further example, an addition will be made for any royalty or licence fee paid by the buyer to the seller, unless the buyer can establish that such payment is dis....
X X X X Extracts X X X X
X X X X Extracts X X X X
....a filed a Bill of Entry for one set of diskette of software program along with manual and countrywide license fee but subsequently invoice of the same number and date giving breakup for the licence fee for use at single site and additional licence fee for countrywide use was filed and refund was claimed on the ground that duty was payable only on the cost of diskette and manuals and the licence fee for single site use and no duty was payable for the production of the software in the country of importation for countrywide use. The Supreme Court held that the licence fee charged towards countrywide use of the same software was includible in the assessable value of the imported software. Revenue s contention in the present case is that for media packs imported under commercial imports (where licence fee was collected from the customers and 56% of that was remitted by OIPL to Oracle USA as per the Software Duplication and Distribution Licence Agreement) as the licence fee was a condition of sale. It is seen that as per the prescribed procedure followed by OIPL, the pre-sale and sales teams of OIPL met and negotiated with perspective Indian customers offering them necessary information ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ithout right of exploitation imported goods would be of no use. Indeed, in the present case also, the sale of software to customers is nothing but sale of software to customers to use the same as without being able to use, buying of software by customers is meaningless because Oracle USA retains all right, title and interest in all intellectual property rights such as those embedded in or used by the programs.... as per Article 18 of the Master Service Agreement. In the case of CCE, New Delhi Vs. Living Media India Ltd. [2011 (271) ELT 3 (SC], it was held by Supreme Court that royalty became payable as soon as cassettes/CDs were distributed/sold and hence being condition of sale, such royalty was includible in assessable value. This judgement was followed in the case of Star Entertainment Pvt. Ltd. Vs. CC, Mumbai [2014-TIOL-583-CESTAT-Mum] to hold that royalties/licence fees paid for the import of beta/digibeta tapes containing films are includible in assessable value. We must again mention here that none of the judgements referred to in regard to includibility of royalty in assessable value involve identical facts and circumstances and therefore we have laid primary emphasis (and ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ra) that a decision is an authority for what it decides and not what can be logically deduced therefrom. We are not even for a moment suggesting that mutual exclusivity of customs duty and service tax can be logically deduced from the Superme Court judgement in the case of Imagic Creative Pvt. Ltd. (supra). No constitutional provision is brought to our notice inhibiting levy of taxes under different statutes on the same transactions. It is axiomatic that the same transaction may inhere distinct taxable events, exigible to different taxes. The only question is whether demand of tax is sustainable under the particular statute, as claimed by Revenue. The licence fee being a condition of sale is includible in the assessable value of the media packs in terms of the Customs Act, 1962 and the Rules made thereunder and there is no provision warranting exclusion from the assessable value for customs purposes, on the ground that service tax has become chargeable on such licence fee under a different statute. 15. Coming to OIPL s contention that no redemption fine can be imposed when the goods have been cleared without any bond and are not available for confiscation, we find force in this ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....emka & Co. (supra) and Pioneer Silk Mills Pvt. Ltd. (supra). We are in agreement with this proposition and therefore we refrain from discussing the said judgements. The appellants also cited the judgement in the case of Supreme Woollen Mills Ltd. (supra), Silkone International (supra) and several others to advance the proposition that penalty provisions of Customs Act were not applicable to the cases of non-payment of anti-dumping duty and that the same principle is applicable with regard to leviability of interest (India Carbon Ltd. (supra) and V.V.S. Sugar (supra). We have perused these judgements. Many of them dealt with Anti-dumping duty/Special Additional Duty (SAD) leviable under various sections (but not Section 3) of Customs Tariff Act, 1975 and in those sections of the Customs Tariff Act, 1975 or in the said Act itself, during the relevant period, there was no provision to apply to the Anti-dumping duty/SAD the provisions of Customs Act, 1962 and the rules and regulations made thereunder including those relating to to interest, penalty, confiscation. In the case of Pioneer Silk Mills (supra), the duty involved was the one levied under the Additional Duties of Customs (Good....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... suppression of facts on their part with any intention to evade payment of duty. (ii) During the Special Valuation Branch (SVB) investigation they had declared that OIPL is related to Oracle Ireland in Sept 2005/January 2007. (iii) Licence fee remitted to Oracle USA was not included in the assessable value because of their bona fide belief that it was not includible. (iv) In the FIPB approval application it had been clearly mentioned that 56% of the licence fee will be remedied to Oracle USA. (v) They had been following the same system even prior to 01.03.2006 when no countervailing duty was leviable and at that time there was no reason for them to indulge in wilful misstatement or suppression of facts. (vi) The issue involves interpretation of law and therefore allegation of suppression and imposition of penalties cannot be sustained; several judgements (mentioned earlier) were cited to that effect. The Ld. Departmental Representative on the other hand strenuously argued that (i) OIPL did not declare while filing the Bills of Entry that the goods were coming from a related person and also did not disclose the payment of licence fee to Oracle USA. (ii) When investigation started....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ware from Oracle Ireland that both are related as group companies and in both of them Oracle USA was a majority shareholder. Indeed it would be incredibly naive on the part of the well known company like Oracle to believe that OIPL could successfully hide its relationship with Oracle Ireland by not declaring the relationship in the Bills of Entry when their respective names were so demonstrative of they being related. On the other hand, in the given circumstances, it sounds incredible that a professional organisation like Indian Customs should claim that it did not / could not realise that the imports by OIPL from Oracle Ireland were from a related person. Further, the fact that the appellant had followed the same system, procedure and practice of declaring assessable value even during the period prior to 01.03.2006 when there was no duty to be evaded at all, goes a long way in support of the contention of the appellants that there was no intention on their part to wilfully mis-state or suppress any facts. In any case, there is evidence on record that in September, 2005 and January, 2007 they submitted the details about OIPL s relationship with Oracle Ireland and Oracle USA to Cust....
X X X X Extracts X X X X
X X X X Extracts X X X X
....en questioned/ altered by the adjudicating authority which shows that the price charged by Oracle Ireland from OIPL was not influenced by their mutual relationship. It has been clearly brought out in the preceding paras that this case involves interpretation regarding includiblity of the licence fee remitted by OIPL to Oracle USA in the assessable value of media packs and is devoid of mens rea. Thus, essentially, as it turns out, it is not a case involving evasion of duty but a case of mere possible short payment of duty in respect of commercial imports of media packs involving a purely interpretational issue where OIPL has made an arguable case that there was no short payment as the licence fee was not includible in the assessable value notwithstanding our finding that such licence fee remitted by OIPL to Oracle USA is includible in the assessable value. Such cases devoid of mens rea are simple demand cases involving bona fide interpretational difference of opinion. Non-desirability of imposing of penalty in such cases can be inferred from the case laws discussed/analysed earlier and when penalty is not justified, then as a corollary nor is confiscation. We may observe in passing ....