2004 (3) TMI 535 - AT - Customs

Summary

Issues:
1. Shortfall in export obligation demand
2. Inclusion of design and engineering charges in the assessable value of imported goods

Issue 1: Shortfall in export obligation demand
The appellant was asked to pay a significant sum for the shortfall in export obligation. The appellant contended that the demand was not sustainable due to clearance granted by DGFT authorities. This contention was supported by Board Circular No. 25/2003. The Tribunal considered the appellant's argument and found prima facie merit in it.

Issue 2: Inclusion of design and engineering charges
A demand of a substantial amount was made on the grounds that design and engineering charges should be added to the assessable value of imported goods under Rule 9 of the Customs Valuation Rules. The appellant argued that the design and drawings were not necessary for the manufacture of the imported goods but for the fabrication of the plant in India. The Tribunal referenced decisions in similar cases to support the appellant's position. It was established that design and drawings were related to the fabrication of the plant and not the imported goods themselves.

In conclusion, the Tribunal found merit in the appellant's arguments for both issues. As a result, the condition for pre-deposit was waived, and there was a stay of recovery of the demand. The appeal was scheduled for regular hearing on a specified date.