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Issues:
1. Addition of cost of engineering to assessable value 2. Classification under heading 8479.89 and benefit of Notification 59/87-Cus. 3. Confiscation of goods under Section 111(d) and 111(m) of the Customs Act, 1962 Analysis: Issue 1: The appellants imported a plant and sought clearance under license. The contract indicated a specific sum for basic and detailed engineering, which was questioned for addition to the assessable value. The show cause notice alleged liability for confiscation under Section 111(d) due to the failure to declare the inclusion. The Commissioner initially ordered penalty, but the Tribunal remanded the matter, noting no misdeclaration or intention to evade duty. In the subsequent adjudication, the Commissioner included the value of technology in the assessable value, denying classification under heading 8419.39 and opting for 8479.89. The Commissioner held the goods liable for confiscation due to shortfall in value, imposing a fine equal to the value of drawings and designs. The Tribunal, in the second round, reduced the fine significantly, considering the bifurcation of technology value from the physical plant's value. Issue 2: Regarding the classification under heading 8479.89 and the benefit of Notification 59/87-Cus., the Tribunal examined the relevant entry and referred to a previous judgment allowing exemption for machinery used in production. By analyzing the Customs Tariff and the notification, it was determined that the importers were eligible for the concessional rate of duty under the notification. Issue 3: In terms of confiscation under Section 111(d) and 111(m), the Tribunal held that the orders of confiscation under Section 111(m) were not sustainable based on the remand order observations. The liability under Section 111(d) arose due to a shortfall in the license value after adding the value of drawings and designs. The Tribunal considered the Import Export Policy and correspondence to reduce the fine imposed for confiscation, acknowledging the separation of technology value from the plant's value. In conclusion, the Tribunal allowed the appeal, granting consequential benefits to the importers based on the detailed analysis and considerations of the issues involved in the case.
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