TaxTMI 
TaxTMI 
2016 (2) TMI 615
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.... collaboration agreement by deleting the clause relating to payment of design and drawings. The said SVB order was reviewed and followed upto 22.12.2013. However, the Dy. Commissioner of Customs (SVB) in his OIO dated 05.03.2013 while reviewing the order rejected the transaction value and ordered for loading. For proper appreciation of the case, the operative part of the order is reproduced as under:- a) The Indian Company M/s. Schwing Stetter (India) Pvt. Ltd., Kancheepuram and the Foreign Suppliers M/s. Valeo Matteriaux De Friction, France and their Associate Companies are related to each other in terms of Rule 2(2)(i)&(iv)& (vi) of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007. b) I reject the invoice value of 49 Nos. of Schwing Mobile Concrete Pump Placers of 90/120 CUM/ HR capacity, of Model No. S36 referred in para 37 above under Rule 12(1) of CVR, 2007 read with Section 14(1) of the Customs Act, 1962. c) I re-determine the value of 49 Nos. of Schwing Mobile Concrete Pump Placer of 90/120 CUM/HR capacity, of Model No. S36 referred in para 37 as EUR 79,50,950 (Ex-works) as against the declared value of EUR 74,04,350 (Ex....
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....) The importer shall be given an option to pay appropriate duty on the above mentioned amount as lump sum payment for that particular financial year at the rates applicable to the said goods imported under every Bill of Entry for a particular Year. k) I order to load Rs. 5,48,67,280 /- (Rupee Five Crore Forty Eight Lakh Sixty Seven Thousand Two Hundred and Eighty) to the Transaction Value of parts, spare parts amd components of construction/ concrete machineries imported during the Year 2012-2013 in terms of Rule 10(1)(e) of CVR,2007. l) The importer shall be given an option to pay appropriate duty on the above mentioned amount as lump sum payment for that particular financial year at the rate of duty prevailing for the imported parts, spare parts and/ or components of construction/ concrete machineries or at the rates applicable to the said goods imported under every Bill of Entry for a particular Year. m) In case of future imports, The Importer shall make Quarterly declaration appropriate duty shall be collected by adding the said Amount so declared by the Importers to the transaction value of the imported goods in terms of Rule 10(1) (c)/ Rule 10(1)(e)....
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....y. He drew attention to page 98, 99, 102 and 102A of the paper book containing technical literature/catalogue/diagram of Truck Mounted Concrete Pump S 36X model. She submits that the appellants are importing components and manufacturing Truck Mounted Concrete Pump S 36X model by using the imported components and same are cleared to domestic market. He further submits that they have also imported fully assembled Truck Mounted Concrete Pump S 36X model and cleared on high sea sales. They have imported the machine Boom Placer and Pumps are manufactured in their factory and assembled along with Bloom Placer and cleared on payment of excise duty. The adjudicating authority held that the price of Boom Placer is based on their own imported invoices relating to fully assembled which contains Pumps. The adjudicating authority held that the price of knowhow fee paid to the overseas supplier has been loaded to the transaction value and also loaded the fees paid towards reimbursement of repair and maintenance expenses for the services rendered by the foreign collaborator. He submits that both the adjudicating authority and the Commissioner (Appeals) have confirmed the loading of all the three ....
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....ncrete pumps of model S 36X and the declared price is EUR 1,63,250. He drew our attention to page 157 of the paper book volume-II the copy of invoice dated 19.08.2011, and submitted that the said invoice relates to import of fully assembled equipment, which was sold on high sea sales. The said equipment includes Pump kit. In this case, what was imported is without pump kits as they have started manufacturing the pump kits in their own factory itself. He drew attention to page 151 of the paper book volume-II enclosing invoice dated 08.06.2011 and submits that though the description in both the invoices refers to the same model, the total gross weight is 17260 kgs in this case and the fully assembled equipment sold to high sea sales referred under invoice dated 19.08.11, the gross weight is 18560 kgs. The difference in weight in the later case relates to the weight of the pump kit, which they have not imported. To substantiate this, he relied on the invoices at page 159, where they have imported only the pump kits and the declared weight of 8516 kgs for four pump kits fully assembled. He further submits that if both the invoices referred at page 155 and 159 are taken together, the to....
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....our attention to page 63 of the OIA para 4 and 5. The LA modified the DC SVB's order and ordered that until the proceedings under various sections are being finalized, the assessment shall continue to remain provisional and 5% EDD shall be collected on all imports. He relied on the Boards Circular dated 23.02.2001 enclosed at page 119 of volume-I and drew attention to the paras 9 & 10 of the Boards Circular and submits that the Commissioner (Appeals) direction of loading of 5% EDD is totally contradictory to the Boards Circular. He also drew attention to the Commissioners interim order dated 17.06.2014, at the time of granting waiver, the Commissioner has clearly recorded that the appellant is a regular importer with a long standing track record of import and export and insisting of security may be avoided whereas the same authority in the final order took a different stand which is totally contradictory. He relied on the decision of the Honble Supreme Court decision in the case of UOI Vs. Mahindra & Mahindra Ltd. 1995 (76) ELT 481 (S.C.). 8. The Ld. AR appearing on behalf of the Revenue reiterates the findings of the order of the DC, SVB as well as the impugned order. She s....
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.... on the price variations as well as on the loading of technical knowhow. He submits that these facts can be verified at any time from the records available with them. He further submits that the comparable invoice relied by the Department, where they have imported fully assembled equipment with pump kit and same was sold on high sea sales basis to third party. He submits that the Commissioner (Appeals) ordered 5% EDD and invoking Section 28(4) and 28 AA is not justified as they have not suppressed any facts. He relied on the decision of the Hon'ble High Court of Bombay in the case of Forbo Siegling Movement Systems India Pvt. Ltd. Vs. UOI 2013 (296) ELT 443 (Bom.) and pleaded to allow their appeal. 12. We have carefully considered the submissions of both sides and perused the records and agreements. The short issue in this appeal relates to determination of value and loading on the goods imported from their related supplier by the Special Valuation Branch. From the facts already set out above, there is no dispute on the relationship between the appellant and the overseas company as the appellant company is a wholly owned subsidiary of M/s.Schwing Project Indien GmbH, Germany (Sc....
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....e price of pumps imported and sold by the appellants to third parties on high sea sale basis. The appellant's main contention that the goods imported and sold to third parties are fully assembled pumps with pump kits ready to use by the user industry whereas what they imported were pumps without pump kits as the pump kits were manufactured indigenously at their plant and the same were supplied along with pumps after discharging excise duty. We have perused import invoices No.61535189/11R 1453 dt. 19.8.2011 relating to high sea sale annexed at page 157 of paper book and Invoice No.61546090/12 R1031 dt. 09.02.2012 relating to their own imports of pumps without pump kits annexed at Sl.No.5 of typed set. The description and quantity and price, gross weight and net weight of both invoices are tabulated as under :- I II 1. Invoice No. 61535189/11R 1453 61546090/12R1031 2. Date 19.8.2011 (High seas sale to third party) 09.02.2012 (Self) 3. Description SCHWING mobile concrete pump placer of 90/120 cuM/Hr capacity, model S36X P2023-110/75 RB, 380L complete with accessories SCHWING mobile concrete pump placer of 90/120 CuM /HR capacity, Model S ....
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....refers to the pump kit. The unit price of pumpkit declared in the said invoice dt. 13.8.2012 in Euro 13,350 per piece. In their own imports covered under Invoice dt.9.2.12, the declared price of pump is Euro 1,49,000 and if the per unit price of pump kit i.e. Euro 13,350/- is added to the appellant declared price of pump, the total price comes to Euro 1,62,350 (1,49,000 + 13,350) which is quoted in the highsea sale invoice dt. 19.8.2011. Therefore this fact proves beyond doubt that the comparable price of third party sale of pumps adopted by the LA's referred at invoice dt.19.8.11 confirms that what was imported and sold to third party on high sea sale basis is a complete pump with pump kit valued at Euro 1,62,350.00. 18. It is pertinent to see that the appellant had set up plant for manufacture of pump kits indigenously by using various components. Once the pump kits are manufactured and the same are fitted with mobile concrete pump which are imported and cleared by the appellants. The whole unit is cleared to the customer as complete pump with pump kit as one unit after value addition and payment of appropriate excise duty. This is evident from the Central Excise Invoice No.00....
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....O AS FOLLOWS : 1. Schwing agrees to irrevocably transfer the required technical know how to SSI for a one time consideration of EURO 720,000/- (EURO seven hundred and twenty thousand only) 2. In lieu of this, Schwing agrees to reduce the per unit price of the boom pump, at the level of Indigenization as described in schedule A forming part of this agreement, for the fist 60 units to be supplied during the January to December 2012, by Euro 12,000 per unit i.e. From Euro 149,000 per unit to Euro 137,000 per unit. The invoices for these first 60 units should separately mention that the development cost of EURO 12,000/- per unit has already been remitted, giving the break-up of such deduction and referring to the invoice for EURO 720,000/- including reference to this agreement. 3. Schwing also agrees to re-price all supplies beyond these 60 units, based on the then level of indigenization and may return to its previous price per unit, depending on the then current calculation. 4. Schwing agrees that there will be no further charges for technological know how or R&D for the initial development of this product (S36). However, any future expenses on upg....
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....tion value of imported goods. Since the agreement is effective from January 2012 the Technical know how fee cannot be added to the imports made in 2011 and not applicable to other models as well other than the pumps model S36X. 22. In view of the above facts, we are of the considered view that the original authority ordering of loading of Technical know how fee of Euro 720,000 to the Transaction value of 76 Nos Pumps under Rule 10 (1) (c) is not sustainable and not backed with any evidence. Accordingly we set aside the impugned order in so far as the addition of Technical know how fee to the Transaction value of pumps. 23. As regards the third issue of loading of service fees paid to overseas supplier towards rendering various services the Lower Authority ordered for loading of the amount to the Transaction value on the grounds that both the parties are related and the service charges paid by the appellant is related to the import of goods. 24. On perusal of the Service Agreement dt.3.3.2011 we find that the principal agreed to provide Management Services, Sales Services, General Administrative Services which includes, marketing legal and IT Support Services etc. and the c....
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....ealisation of differential duty and also ordered to collect 5% EDD on all future imports and also directed the department to secure with additional security. We find that this direction is beyond the scope of the OIO dt. 5.3.2013 which was appealed by the appellant before LAA. It is relevant to state that it is the case where the DC (SVB) has decided valuation issues and ordered loading under Customs Valuation Rules and directed the appraising group to finalize the assessment accordingly as per his order. Therefore, the LAA order to continue provisional assessment for all future imports does not arise. 29. It is interesting to note that the Commissioner (Appeals) in his interim order dt. 17.6.2014 (annexed at page 219) while granting the stay and waiver of predeposit stated that the appellants have long standing track record of imports and exports and directed that insisting of security deposit to be avoided. The relevant paragraph is reproduced as under :- I find no reason for the goods under import to be denied clearance. If the Assessment Groups at Air Cargo Complex, Chennai finds this order in any way an impediment to clear the goods, they may keep the assessment pr....