2015 (7) TMI 789 - HC - Customs

Valuation - import of gods from related party - original copy of the agreement is not available - Non acceptance of the certified copy of the document, namely, Technology Transfer Agreement - Held that - Commissioner of Customs (Appeals) has already come to a definite conclusion against the petitioner that they have not produced the corresponding annexures without which the agreement cannot be said to be complete or implementable. Further more, while dealing with the balance sheet which shows the flow back of ₹ 18,11,20,000/- in the year 2010-11 to the related supplier in the name of fees for shared services, the second respondent-appellate authority has given a finding that the petitioner has not produced any agreement in this regard, on this basis, the assessing officer has been directed to redetermine the value in terms of the Customs Valuation Rules, 2007 for the period commencing from 2010 onwards with a further finding that the declared value cannot be accepted in terms of Rule 3(3)(a) / 3(3)(b) of the Customs Valuation Rules, 2007. Certified true copy of the Technical Transfer Agreement has been filed before this Court with supporting affidavit sworn to by one of the two signatories to the Technical Transfer Agreement dated 1.1.2009 relating to Wind Turbine Model AE 59 / 800 KW on behalf of Gamesa Innovation and Technology, S.L. with Gamesa Wind Turbines Private Limited stating that the original of the Technical Transfer Agreement executed by him as an authorised signatory of Gamesa Innovation and Technology, S.L, Spain is not traceable despite diligent search, however, as per the established internal practice of the company, as soon as an agreement is executed, the original is scanned and the scanned copy is archived and the attached copy of the aforesaid agreement initialed by him is print out of the original agreement so scanned and archived. No embargo or impediment for the second respondent to consider the same as per Section 63 of the Indian Evidence Act, which says that the certified copy of the original, accompanied by a sworn affidavit of one of the signatories to the original Technical Transfer Agreement dated 1.1.2009 relating to Wind Turbine Model AE 59 / 800 KW on behalf of the company, can be taken as secondary evidence - photograph of an original is secondary evidence of its contents, though the two have not been compared, if it is proved that the thing photographed was the original, therefore, there is no impediment for the second respondent to consider the issue afresh. - Matter remanded back - Decided in favour of assessee.

Summary

Issues:
Challenge to refusal of certified copy of Technology Transfer Agreement (TTA) by second respondent in Appeal No.C.Cus.II No.382 of 2015.

Analysis:
1. Background and Petitioner's Submission: The petitioner, a subsidiary of a renowned company, is engaged in wind and solar energy sectors. It imports components from its parent and sister concerns. The Customs Valuation Rules, 2007 were applied due to related party status. The assessing officer found no influence on price due to relationship and accepted the transaction value under Rule 3(3)(a).

2. Appeal by Department: The department appealed, alleging lack of investigation and failure to demonstrate the correctness of declared value. The appellate authority set aside the order, citing lack of original agreement and suspicion of tampering. The petitioner sought reconsideration based on a certified copy of the original agreement.

3. Arguments and Court's Analysis: The petitioner argued that the certified copy should be accepted, as per the affidavit of the Managing Director-Technology. The standing counsel contended that the matter should be dealt with by Customs, Excise and Service Tax Appellate Tribunal (CESTAT). However, the Court disagreed, noting deficiencies in the second respondent's findings and the availability of the certified copy.

4. Court's Decision: The Court set aside the impugned order and remanded the matter to the second respondent for fresh consideration. The second respondent was directed to consider the appeal on merits and based on the certified true copy of the Technology Transfer Agreement. The petitioner was granted the opportunity to produce necessary documents and present their case during a personal hearing. The writ petition was allowed, with no costs imposed.