TaxTMI 
TaxTMI 
2004 (6) TMI 80
X X X X Extracts X X X X
X X X X Extracts X X X X
....d to facts and circumstances explained above, I order as follows :- (i) An amount of Rs. 31,03,66,083/- which was paid by M/s. ESSAR to M/s. LURGI Germany towards design and engineering charges including documentation, project handling, workshop tests, etc., shall be added to the assessable value and M/s. ESSAR shall pay appropriate differential duty on the above amount which comes out to Rs. 11,99,29,516/- as per working sheet enclosed together with accruing interest as applicable as per Section 47(2) of the Customs Act, 1962. (ii) In addition to above, M/s. ESSAR shall also pay appropriate duty on Rs. 28,05,29,374/- i.e. proportionate value of ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....of the imported machinery, the amount paid to a foreign company towards licence and engineering charges including documentation, project handling work etc. 3. The appellant's defence is three fold. First that they had fulfilled their export obligation and therefore there was no occasion to raise any duty demand for failure to complete the export. They have referred to the letter dated 8-5-2003 of DGFT informing the appellant that "they had fulfilled the entire export obligation against the said licence". The second, relating to valuation of the equipment is that it is settled law that customs authorities should accept the valuation of the imported goods as approved under the EPCG licence and they are not to carry out valuation of the cap....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ustoms duty. For getting this benefit one has to see whether the goods imported are those mentioned in the licence. If so, their free import is without reference to the value. In such a situation the Customs are not to value the goods imported under the licence invoking the provisions contained in Section 14 of the Act and those in the Valuation Rules. If such an action is taken it will defeat the policy underlying the EPCG scheme and the exemption notification. Customs authorities are not to take action defeating the policy enunciated by Government and notification issued pursuant thereto. 6. As stated earlier various parts of machinery satisfying the term 'capital goods'/components of capital goods, covered by Notification 111/95-Cus.,....
X X X X Extracts X X X X
X X X X Extracts X X X X
....as suppression of value of the goods and misdeclaration with intent to evade payment of customs duty. 7. Short question that arises for consideration is whether the approach made by the Commissioner in valuing the goods in terms of Section 14 of the Customs Act, by loading value with the amounts covered by the other three contracts is justifiable or not. 8. Government of India evolved a policy as Export Promotion Capital Goods scheme. As per that scheme an applicant was entitled to get a licence on fulfilling the conditions mentioned in the scheme. One who obtains licence for import of capital goods under the scheme was to discharge certain export obligations depending on the value of the goods imported. In terms of that policy the co....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ew that Customs authorities are to verify whether the goods are covered by contract or not and not to examine whether there was a misdeclaration to other authorities or not. This view expressed by the Tribunal has been upheld by the Apex Court in Collector of Customs v. Reliance Industries Ltd., 2000 (115) E.L.T. 15. According to their Lordships if import was in terms of import licence, Customs authorities are not to interfere with the import. 9. Learned Counsel representing the Revenue, contended that Customs authorities are having final authority to decide on the question of valuation of the goods imported and in arriving at the value the amounts paid by the importer to the foreign supplier otherwise than under supply contr....
X X X X Extracts X X X X
X X X X Extracts X X X X
....other three contracts have also to be reckoned in valuing the goods for purposes of assessment to customs duty. Commissioner has completely misdirected himself in passing the impugned order. We set aside the order in its entirety". 6. Under the Export Promotion Capital Goods Scheme, an exporter gives bank guarantee for the export performance, to the DGFT. That guarantee is released only after the obligation is fulfilled. In these circumstances, it is grossly improper for other authorities to start investigation of the matter. Therefore, these proceedings were entirely misdirected. 7. In the view we have taken above, the appeal succeeds and is allowed after setting aside the impugned order. 8. Before parting with the case, we feel c....