2009 (5) TMI 854 - AT - Customs

Valuation of imported equipment - Autotron Packaging Colour to Colour Registration Control System - Project Consultancy charge - applicability of Rule 9(1)(e) of the Valuation Rules

Summary

Issues: Valuation of imported equipment; Enhancement of value based on another party's import; Inclusion of Project Consultancy Charges in Transaction Value; Applicability of Rule 9(1)(e).

Valuation of imported equipment:
The case involved the valuation of an Autotron Packaging Colour to Colour Registration Control System imported for use in Rotogravure Printing Machines. The Department sought to revise the value based on another party's import, leading to a dispute. The Assistant Commissioner enhanced the value by adding software and Project Consultancy Charges. The Commissioner (Appeals) upheld the addition of Project Consultancy Charges, prompting the appellant to challenge the orders before the Tribunal.

Enhancement of value based on another party's import:
The Tribunal noted that the imported machines by the appellant and the other party were not comparable, making the value enhancement inappropriate. Citing the Gujarat Ambuja case, it emphasized that charges related to post-importation activities should not be included in the assessable value. Referring to the NCL Industries case, it reiterated that post-importation charges are not includible. The Tribunal concluded that the Project Consultancy Charges, covered by a separate contract and not a condition of sale, should not be added to the assessable value.

Inclusion of Project Consultancy Charges in Transaction Value:
The appellant argued that Project Consultancy Charges, being for post-importation activities, should not be included in the Transaction Value. They relied on legal precedents and the Interpretative Note to Rule 4 of the Customs Valuation Rules to support their stance. The Tribunal concurred, stating that such charges, covered by a separate contract, were not part of the Transaction Value and should not be added.

Applicability of Rule 9(1)(e):
The appellant contended that Rule 9(1)(e) was not applicable as the Project Consultancy Charges were not a condition of sale and were covered by a separate contract. They referenced legal decisions to support their argument. The Tribunal agreed, emphasizing that under Rule 9(1)(e), charges not related to the imported goods' value should not be added. It highlighted the distinction between the charges and the price paid for the imported goods, ultimately setting aside the impugned order and allowing the appeal.