2016 (12) TMI 1100 - AT - Customs

Validity of order of Original authority - foreign collaboration agreement - non-examination of the relevant documents - Rule 4(3) of CVR, 1988 - Held that - Revenue s appeal was allowed only on the ground that the Adjudicating authority passed the order without examination of the relevant documents whereas the Commissioner(Appeals) has not gone into facts and legal issues of the matter therefore appeal was not supposed to be allowed but it should have been remanded to the Adjudicating authority - appeal allowed by way of remand.

Summary

Issues:
1. Valuation of imported parts for manufacture of cooker hoods.
2. Interpretation of technical knowhow fees in relation to Customs Valuation Rules.
3. Adequacy of examination of relevant documents by the adjudicating authority.
4. Validity of the Commissioner(Appeals) decision and the need for remand.

Valuation of Imported Parts:
The appellant imported parts for manufacturing cooker hoods from their foreign collaborator. The Gatt Valuation Cell examined the value, and the appellant submitted documents in response to a questionnaire. The adjudicating authority found that the technical knowhow fees charged by the foreign company were not covered under Customs Valuation Rules. The authority accepted the transaction value declared in the invoices. The Revenue appealed the decision of the Order-in-Original, leading to the Commissioner(Appeals) allowing the appeal, citing improper examination of records by the lower authority.

Interpretation of Technical Knowhow Fees:
The appellant argued that the technical knowhow fees were related to goods manufactured from imported material, not the imported goods themselves, and thus not a condition for sale. The Commissioner(Appeals) observed the lack of proper examination of documents by the adjudicating authority but still allowed the Revenue's appeal. The Revenue maintained that the original authority did not adequately examine the documents, justifying the appeal's approval.

Adequacy of Examination of Relevant Documents:
The Commissioner(Appeals' decision was based on the lack of examination of relevant documents by the adjudicating authority. It was noted that the lower authority's order did not comply with Rule 4(3) of Customs Valuation Rules, 1988. The Tribunal found that both the Commissioner(Appeals) and the adjudicating authority failed to thoroughly examine the documents, necessitating a remand to the original adjudicating authority for a fresh order after proper examination.

Validity of Commissioner(Appeals) Decision and Remand:
The Tribunal determined that the Revenue's appeal was allowed solely due to the adjudicating authority's failure to examine relevant documents. As the Commissioner(Appeals) did not delve into the factual and legal aspects, the appeal should have been remanded rather than allowed. Consequently, the impugned order was set aside, and the appeal was remanded to the original adjudicating authority for a comprehensive reevaluation and a fresh order within three months.