2000 (8) TMI 817 - AT - Customs

Summary

Issues involved:
1. Inclusion of Service Charges in the assessable value of goods.
2. Application of conversion rate for arriving at the assessable value.
3. Inclusion of stamp duty in the assessable value.
4. Determination of limitation period for the case.
5. Reduction of penalties imposed on the appellants.

Inclusion of Service Charges in the assessable value of goods:
The issue revolved around whether Service Charges paid by the appellants to M/s. M.S.T.C. should be added to the assessable value of goods purchased on high-sea-sale basis. Referring to a Supreme Court case, the Tribunal concluded that these charges are includible in the assessable value. The appellants did not contest this decision, leading to the charges being considered part of the assessable value.

Application of conversion rate for arriving at the assessable value:
In Appeal No. C/V-161/95, the question arose regarding the conversion rate to be applied for determining the assessable value. The appellants argued that the conversion should be based on the rate notified by the Central Government under Section 14 of the Customs Act, 1962. They contended that M/s. M.S.T.C.'s method of conversion was not in line with the statutory guidelines. The Tribunal agreed with the appellants, emphasizing the mandatory nature of the guidelines for converting foreign currency into Indian rupees.

Inclusion of stamp duty in the assessable value:
Another issue in Appeal No. C/V-161/95 was whether stamp duty on documents should be added to the assessable value. The Tribunal ruled that stamp duty does not form part of the transaction value or price of imported goods. As it is a statutory levy, not related to the goods' price or remuneration, the Tribunal held that stamp duty cannot be included in the assessable value.

Determination of limitation period for the case:
Regarding the limitation period, the Commissioner found the appellants guilty of wilful suppression of facts related to valuation. The Commissioner applied the extended five-year period due to this suppression. The appellants argued that they disclosed the payment of Service Charges to M.S.T.C. to the Department. However, as this disclosure was not endorsed on the bill of entry, the Tribunal upheld the extended limitation period.

Reduction of penalties imposed on the appellants:
In light of the circumstances, the Tribunal decided to reduce the penalties imposed on the appellants by 50% in each appeal. This reduction was deemed necessary based on the facts and merits of the case. Ultimately, the appeals were disposed of with the penalties being reduced accordingly.