TaxTMI 
TaxTMI 
2016 (10) TMI 944
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.... import of Plant and Machinery for setting up of Palm Oil Mill at Peddapuram, East Godavari Dist., AP under Project Import Regulations, 1986. The supplier was M/s Salcon Engineering Sendrian Berhead, Malaysia. Along with their application, the Appellants had submitted project report, plan layout and process chart, list items etc., vide Government of India, Ministry of Agriculture, purchase order No. 101 dated 25.4.98. The Government of India, Ministry of Agriculture, vide their letter dated 06.10.98 recommended to the Custom House to consider import of plant and equipment along with spares. As per Public Notice No.21/96, the Appellants submitted security deposit of 2% of CIF value which worked out to Rs. 12.47 Lakhs vide R.D.No.370, C.M.235....
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.... his arguments by adverting to the purchase order, agreement and other related documents. 3.1 He submitted that the Appellant had placed Purchase Order No. 101 dated 24.5.1998 on M/s. Salcon Engineering Sendrian Berhead, Malaysia (hereinafter referred to as 'SALCON') for supply of certain specific machinery and spares. The details of the machinery and spares were specified in the Purchase Order dated 24.5.1998 and since the goods were standard equipment and not customised goods, there was no necessity or requirement for M/s. SALCON to offer any design, technical specifications or drawings for the manufacture of these goods. 3.2 On 20.5.1998, the Appellant had entered into two agreements with M/s. SALOON, one with regard to the....
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.... following case laws. 1. Collector of Customs Vs Visakhapatnam Steel Project [1992(62)ELT-833(Tri). 2. Collector of Customs Vs Visakhapatnam Steel Project [1992(62)ELT572(Tri), 3. Umbergaon Rubber(P)Ltd Vs Collector of Central Excise, [1992(62)ELT576(Tri). 4. Gujarat Mineral Development Corpn Ltd. Vs CCE, & C Ahmedabad [2005(190)ELT-5(SC) 5. Commissioner of Customs(lmport0 Mumbai Vs Jaypee Bela Cement [2008(227)ELT-292(Tri-Mum). 6. Bharat Forge Ltd vs CCE, Pune-III, [2008(227)ELT-299(Tri-Mum) 5. On behalf of department, Ld AR Shri. P.S. Reddy reiterated the findings in the impugned order. He also placed reliance on the Hon'ble Apex Court judgment in the Essar Gujarat case 2002-TIOL 44-SC-Cus. 6. Heard b....
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.... lump sum of Ringgit Malayasia RM 1,400,000. In particular it is mandated that predominant amount of RM will have to be paid upon receipt of the documents pertaining to the complete technical Specifications and Drawings. 8. It is seen that department has not proposed or demanded addition of lump sum amount of RM 1,700,000 mandated in the first agreement for supervision and management. What has been sought to be added to assessable value is RM 1,400,000 towards Design & Engineering charges mandated in second agreement. From the facts and circumstances of the case, it is evident that as per purchase order SESB only would fabricate and supply all crucial machinery and equipment, for which appellant would have to pay lump sum of RM 5,566,840....
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.... fabrication etc. of the said plant and machinery. It can be inferred that M/s SALCON was responsible for designing, fabrication of the plant and machinery. Far as the Appellants' contentions that the supplier had purchased the goods and not manufactured themselves, are concerned, the same cannot be accepted. It is already explained above that M/s SALCON was responsible for designing, fabrication of the plant and machinery as per the purchase order No. PO/101 dated 25.04.1998. Hence, the design and engineering charges were required to be included in the assessable value for calculation of duty" 10. We find sustenand and support for the aforesaid conclusions in the case laws relied upon by appellant relate to cases with different fact....
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....or made. This aspect is irrelevant since what is taxed is the final product as defined and it will be an absurdity to contend that the value for the purposes of duty ought to be the cost of the canvas and the oil paint even though the composite product, i.e., the painting is worth millions." In the said case , the apex Court further considered the issue whether design and engineering charges are loadable to the value of the goods imported when the goods are manufactured on the basis of design, engineering, specifications provided by the foreign supplier and held as follows:- "We are of the opinion that the Tribunal was right in holding that the agreement relating to purchase of equipment cannot be disassociated from other agreem....