1999 (1) TMI 429 - AT - Customs

Summary

Issues Involved:
The judgment addresses the inclusion of service charges in the assessable value for customs duty calculation and the applicability of Rule 9(1)(d) of GATT Valuation Rules.

Issue 1: Inclusion of Service Charges in Assessable Value
The Appellants filed refund claims due to the inclusion of service charges in the assessable value for customs duty calculation. The Asstt. Collector and the Collector (Appeals) held that the service charges form part of the assessable value under the Customs Valuation Rules, 1988. The Appellants contended that the service charges should not be included in the assessable value under Section 14 of the Customs Act, 1962. They argued that the service charges were in the nature of buying commission and should be excluded from the assessable value as per Rule 9(1)(a)(i) of the Customs Valuation Rules, 1988. The Tribunal examined the case law cited by the Appellants, including the decision of the Apex Court in Apollo Tyres v. CC [1997 (89) E.L.T. 7 (S.C.)], and concluded that the service charges collected by the canalising agency were buying commission and should not be included in the invoice value of the imported goods.

Issue 2: Applicability of Rule 9(1)(d) of GATT Valuation Rules
The impugned order relied on Rule 9(1)(d) of GATT Valuation Rules to justify the inclusion of service charges in the assessable value. However, the Tribunal determined that in this case, the service charges collected by the canalising agency were not commission or brokerage paid by the foreign supplier to the Indian importer. Since the service charges were collected by the canalising agency and were akin to buying commission, they were exempted from inclusion in the assessable value as per Rule 9(1)(a)(i) of the Customs Valuation Rules, 1988.

In conclusion, the Tribunal set aside the impugned order and allowed the appeals, stating that the service charges collected by the canalising agency should not be included in the assessable value for customs duty calculation. Any consequential relief was deemed admissible to the Appellants in accordance with the law.