TaxTMI 
TaxTMI 
2021 (1) TMI 1217
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....their related entity namely M/s. Toshiba Machine Machinery Co. Japan. The imports were made under Zero Duty EPCG scheme. Since the imports were through related persons, the assessee was subjected to investigation by Special Valuation Branch of Customs House, Chennai. The original authority passed order dated 30-3-2012 inter alia directing the following :- (a) The discount of 351,920,000 JPY given by the related supplier was held to be abnormal and hence rejected. He thus ordered for loading of invoice value by 46.89%. (b) An amount of 30,000,000 JPY which was towards manuals, software, installation and commissioning of the plant was ordered to be added to the value of imported goods holdin....
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....charges are shown as 30,000,000 JPY. The purchase order is enclosed at page 117 of the appeal paper book. This purchase order for 'Turn Miller Machine' clearly provides for supply portion and service portion separately. The purchase order of Turn Miller Machine was for optional items which are in the nature of manuals, software, installation and commissioning, supervisors and their lodging expenses in India and airfares, travelling expenses in India for commuting from lodging place to work site, training for operating and maintenance at the purchaser's plant in five days. Further, the initial quotation made by the supplier provides separately for the supervision which would show the same amount. Thus, these charges were shown as a separate ....
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....rt, of a debt owed by the seller. Activities undertaken by the buyer on his own account, other than those for which an adjustment is provided in rule 10, are not considered to be an indirect payment to the seller, even though they might be regarded as of benefit to the seller. The costs of such activities shall not, therefore, be added to the price actually paid or payable in determining the value of imported goods. The value of imported goods shall not include the following charges or costs, provided that they are distinguished from the price actually paid or payable for the imported goods : (a) Charges for construction, erection, assembly, maintenance or technical assistance, undertaken after importation on i....
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....It is usual practice in the industry to offer such discounts. Though the original authority held that discount is abnormal, there is no evidence to support in the form of contemporaneous imports. To substantiate his argument, he relied upon the decision of the Hon'ble Supreme Court in the case of Eicher Tractors Ltd. v. Commissioner of Customs, Mumbai - 2000 (122) E.L.T. 321 (S.C.). 9. The Ld. AR Shri Vikas Jhajharia appeared and argued on behalf of the department. He referred to para 18 and 19 of the impugned order to argue that the quotation itself mentions the amount for installation and commissioning. This could imply that the activity is a condition of sale of the goods. There is no agreement whatsoever in this regard. The only d....
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....id or payable for the imported goods. In the present case, both in the quotation as well as purchase order, the charges for installation and commissioning have been separately shown by the assessee. Thus, it is seen that for the activities undertaken after importation of the goods need not be included in the invoice value when the cost of such service/activity is shown separately. It is therefore clear that the charges which are for services undertaken after import cannot be loaded into the invoice value. It is also to be stated that from the challan produced by the assessee in page 146, it is seen that they have paid service tax for the very same activity. For this reason also, the charges are in the nature of post-importation activity. Th....
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....o. 3042 of 2004] decided on 13th April, 2015 [2015 (319) E.L.T. 202 (S.C.)]. 8. For all these reasons, we do not find any infirmity in the impugned order of the CESTAT. Thus, this appeal, which is bereft of any merit, is accordingly dismissed." 13. After appreciating the facts and following the above decision of the Hon'ble Supreme Court, we have no hesitation to conclude that the loading of charges towards manuals, software, installation and commissioning of the plant to the value of the imported goods is against provisions of law and not sustainable. The same is set aside. 14. The department's appeal is against setting aside the order of rejecting the discounts and loading of value of 46.89% to the invoice value by the ....