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Classification of designs and drawings under Customs Tariff, Valuation of technical document cost. Classification of designs and drawings under Customs Tariff: The case involved a dispute over the classification of designs and drawings imported under Service Contracts related to the supply of equipment and machinery. The Customs authorities contended that the price paid for the designs and drawings should be treated as part of the value of the machinery and equipment imported under separate Machinery Contracts. The Assistant Commissioner and the Commissioner (Appeals) upheld this view, leading to the appeal. The Tribunal analyzed the Customs Tariff classification, noting that designs and drawings fall under Chapter 49, while machinery falls under Chapter 84. They highlighted that there is no provision in the Tariff for classifying designs and drawings imported as part of machinery contracts under the machinery heading. The Tribunal concluded that designs and drawings should be classified under Chapter 49, not as machinery, and duty should be assessed accordingly. They set aside the order classifying the designs and drawings as machinery. Valuation of technical document cost: The appellants argued that the valuation issue regarding technical document cost had been settled in their favor in a previous case. They contended that the designs and drawings should not be classified as machinery, as alleged by the authorities. The Tribunal agreed with the appellants, stating that the issue of valuation was covered by a Supreme Court decision in the appellants' own case. They found that the classification of the designs and drawings as machinery was incorrect and, therefore, the valuation based on that classification was also incorrect. Consequently, the Tribunal allowed the appeal, setting aside the order on valuation and classification. In conclusion, the Tribunal ruled in favor of the appellants, holding that designs and drawings should be classified under Chapter 49 of the Customs Tariff and not as machinery under Chapter 84. They also determined that the valuation of the technical document cost should not be based on treating the designs and drawings as part of the machinery value. The decision was based on the absence of specific provisions in the Tariff for such classification and valuation, leading to the appeal being allowed.
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