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Issues involved: Determination of assessable value for imported goods u/s Customs Act and Valuation Rules.
Summary: The case involved the appellants, as contractors for a steel plant, importing Design and Engineering Drawings for a gas cleaning plant. The dispute arose when the Asstt. Commissioner of Customs included supervision and training charges in the assessable value of the imported goods. The appellants challenged this decision, leading to the present appeal. Upon hearing arguments from both parties, the Tribunal analyzed the Agreement between the parties dated 27-2-1993. It was noted that the contract with Davy Mckee included provisions for basic design, engineering, supervision, and training services for the gas cleaning plant. The Tribunal emphasized that supervision charges were an integral part of the contract, as defined in the Agreement, and were necessary for the successful setup of the gas cleaning plant. The Tribunal referred to Rule 9 of the Valuation Rules, which allows for the addition of certain costs and services to the transaction value of imported goods. Citing a Supreme Court judgment, it was established that payments for technical services and know-how are to be included in the assessable value of imported goods. Therefore, the Tribunal upheld the inclusion of supervision charges in the assessable value, as they were deemed essential for the functioning of the gas cleaning plant. However, the Tribunal ruled that training charges were not to be added to the assessable value, following a precedent where such charges for training services outside India were considered non-includible. Therefore, the appeal was disposed of by sustaining the addition of supervision charges to the assessable value while excluding training charges from the calculation.
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