2018 (1) TMI 127 - AT - Customs

Valuation - includibility - addition of 50% of the supervision charges in the assessable value - Held that - there being a clear finding of fact that separate agreement is there for supervision of erection commissioning testing and training of the plant for which separately paid by importer and respondent herein over the port importation activity. Accordingly, the said inclusion of the 50% of the charges in the provisional assessment by the Adjudicating Authority in unsustainable - the inclusion of 50% of the supervision charges in the assessments, set aside - decided in favor of assessee.

Summary

Issues:
Appeals filed by Revenue against Order-in-Appeal regarding assessable value of imported goods.

Analysis:
The case involved multiple appeals by the Revenue against the Order-in-Appeal regarding the assessable value of imported goods. The respondent had undertaken expansion work of a blast furnace and imported goods under project import, with 50% of foreign supervision charges added to the assessable value. The First Appellate Authority concluded that these charges were for post-import activities and should not be included in the assessable value. The Revenue argued that such charges should be included as per Customs Valuation Rules. The respondent contended that the supervision charges were part of separate agreements for various activities related to the imported goods. The Tribunal found that the supervision charges were for post-import activities and should not be included in the assessable value, citing previous judgments and the specific nature of the agreements. The Tribunal upheld the Order-in-Appeal, rejecting the Revenue's appeals.

The First Appellate Authority's factual findings were crucial in determining that the supervision charges were not related to the manufacture of the equipment itself and should not be included in the assessable value. The Tribunal noted that the Revenue did not challenge these findings and focused on the legal aspect of the case. The Tribunal referred to the Apex Court's judgment in Essar Steel Ltd., emphasizing that technical services provided post-importation should not be included in the assessable value. The Tribunal highlighted the specific nature of the agreements entered into by the respondent for different aspects of the project, supporting the exclusion of supervision charges from the assessable value. The Tribunal found no reason to interfere with the Order-in-Appeal, affirming its correctness and legality. Consequently, the appeals by the Revenue were rejected, and the Tribunal's decision was pronounced in open court.