TaxTMI 
TaxTMI 
2019 (12) TMI 196
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....ious businesses including importing and selling coal. M/s NTPC, a Government of India Undertaking engaged in generation of thermal electricity, entered into an agreement with the respondent according to which the respondent would import coal as per the requirements of NTPC and supply it to them. The price at which the respondent would sell the coal to M/s NTPC is not a fixed amount but is decided as per the following formula: "A. Coal Price (Port based) 1. C&F Price (US Dollar rate per metric tonne (PMT) converted to Indian Rupees on the basis of applicable exchange rate) arrived at as detailed in the Pricing Methodology. B. Fixed Component: (Port based) 1. Stevedoring, Handling, Clearing & Forwarding cha....
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....he services of importing coal, stevedoring, handling, storage, port clearance, arranging railway rakes, loading, transportation and delivery at NTPC stations. In fact all the above charges were paid on actual basis as per the agreement. In addition to that, service charges @ Rs. 34/- per MT have been paid by M/s NTPC to the respondent. (ii) The transaction between NTPC and the respondent cannot be vivisected as the respondent acted as a canalizing agent importing the impugned goods and therefore the margin paid to NTPC represents the high sea sale profit/pre-importation charges only. (iii) The respondent called for global tenders for coal for purchase not for themselves but for supply to M/s NTPC only. Since the goods were....
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....ta)]. 6. Ld. DR reiterates the above assertions in the appeal. 7. Ld. Counsel for the respondent submits as follows: a) Sale of goods by the respondent to NTPC is not executed on high sea sales and the price paid to them by M/s NTPC cannot be considered as transaction value for the purpose of valuation under Section 14 of the Customs Act. b) The service charges paid to the respondent by M/s NTPC cannot be included for the purpose of evaluation. Rule 10 of the Customs Valuation Rules lists out inclusion which can be made to the price actually paid or payable for the imported goods and this does not include the service charges received by the respondent in the present case. 8. We have considered the arguments on bot....
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....ing various types of non-coking steam Coal. AND WHEREAS, NTPC have requirement of 12.5 MMT (+/-2%) imported noncoking steam coal on 'FOR DESTINATION' basis at NTPC power stations through various ports in India, with detailed Technical Specifications including Scope of Work and terms and conditions contained in the NTPC's invitation for BID along with bidding documents, issued vide letter ref. No. 01/CM/IMP COAL/2009 dated 16.03.2009." 9. As can be seen, the agreement only states that the respondent carries on the business, amongst others, of importing and selling coal. It is true that the respondent has imported coal for supply to NTPC only but they have imported it on their account and in turn sold it to M/s NTPC. It is also tr....
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....rovision of Section 14 of the Act or the Customs Valuation Rules. The case law of Hyderabad Industries Limited (supra) relied upon by the department pertains to period prior to the amendment to Section 14 in 2008. Further, there is a clear finding case that M/s MMTC had acted as a Canalizing Agent. M/s MMTC sold the imported goods in that case to M/s Hyderabad Industries on High Sea sales basis who, in turn, filed the Bill of Entry and cleared the goods. 11. We find no evidence in this case to say that the transaction between M/s NTPC and the respondent is a high sea sales transaction. It is now well settled legal position that high sea sales are those sales which take place before the goods cross the Customs frontiers. Such sales can ta....