2016 (12) TMI 822 - AT - Customs

Valuation of imported goods - Electrical Kitchens Chimney, Gas Hobs, Cook Tops, Cooking Ranges, Built Ovens and Kitchens sinks - The cases of import of above described goods was registered in the Special Valuation Branch of Customs - Rule 8 of Customs Valuation Rules, 1988 or not? - Held that - the Ld. Commissioner(appeals) order is not reasoned, as the findings is with reference to payment of lump sum fees and royalty paid by the importer to the collaborator which is relevant to one supplier i.e. M/s. Nardi Elettrodomestici Spa of Italy. In respect of this issue as against detailed findings given by the adjudicating authority Ld. Commissioner(Appeals) has not rebutted the findings of Ld. Adjudicating authority. We therefore find that the matter should be re-considered by the Commissioner(Appeals) - appeal allowed by way of remand.

Summary

Issues: Customs valuation rules, inclusion of knowhow charges and royalty in the declared price, appeal against Order-in-Original, findings of the adjudicating authority, appeal before the Commissioner(Appeals), detailed analysis of supplier transactions.

Customs Valuation Rules: The case involved the import of Electrical Kitchens Chimney, Gas Hobs, Cook Tops, Cooking Ranges, Built Ovens, and Kitchen Sinks by the Appellant sourced from various suppliers. The Special Valuation Branch of Customs registered the import cases, and the Appellant responded to the department's questionnaire with explanations and documents. The adjudicating authority accepted the invoice values of suppliers under Rule 8 of Customs Valuation Rules, 1988, leading to the finalization of the case.

Inclusion of Knowhow Charges and Royalty: The Order-in-Original contained detailed findings on four suppliers. For M/s. Faber Spa, the department accepted the invoice value under a previous valuation order. The cases involving M/s. Roblin S.A. and Flaminia Aspirator Imalat Ve Ticarets A.S. Turkey did not require additional payments over the invoice value. Regarding M/s. Nardi Elettrodomestici Spa of Italy, the adjudicating authority found that knowhow charges and royalty were not part of the sales condition, thus not includible under Rule 9(1)(c) of Customs Valuation Rules, 1988. However, the Revenue appealed the decision before the Commissioner(Appeals).

Appeal Process: The Commissioner(Appeals) allowed the Revenue's appeal, stating that the importer paid lump-sum fees and royalty to the collaborator, which should be added to the declared price as a condition of sale. The Appellate Tribunal observed that the Commissioner(Appeals) did not provide sufficient reasoning for this decision, specifically concerning the payment of fees and royalty to a single supplier, M/s. Nardi Elettrodomestici Spa of Italy. As the Commissioner(Appeals) did not counter the adjudicating authority's detailed findings, the Tribunal remanded the matter back to the Commissioner(Appeals) for a fresh reasoned order, allowing the appeal by way of remand.

This detailed analysis of the judgment highlights the application of Customs Valuation Rules, the consideration of knowhow charges and royalty in the declared price, the appeal process, and the specific findings related to different suppliers involved in the case.