9911796707
TMI Blog2003 (3) TMI 385X X X X Extracts X X X X X X X X Extracts X X X X ..... cleared them without declaring the same to the Custom s authorities and thus evaded payment of duty on the same. The detailed investigation conducted by the DRI revealed that the respondents herein had entered into a collateral agreement with M/s. Nagase of Japan and the latter had agreed to transfer the technical know-how in writing for a monetary consideration and agreed to give exclusive licence pertaining to manufacture of the said drugs by a specific patented chemical resolution methods using PBA which is required by the licensee i.e. the respondents. As per para 2.1, page No. l of the Option Agreement dated 21-5-1995 entered into between the respondents-importers and the Japan firm viz. M/s. Nagase of Japan, the importers were required to pay a sum of USD 9,00,000/- (Rs. 2.83 crores) towards the payment of option/licence fee and M/s. Nagase of Japan was to grant an option to enter into the licence agreement. In terms of the agreement the importers had remitted USD 6,00,000/- on 6-6-95 and USD 3,00,000/- on 4-8-95 to M/s. Nagase of Japan for supply of technical information about the manufacture of S-Ibuprofen using M/s. Nagase s proprietary resolving agent SPBA and subsequentl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enefit of Notification No. 25/95-Cus., dated 16-3-95 to the technical know-how in printed documents in loose sheets imported by the respondents-importers on payment of USD 9,00,000/-, treating it as a Manual instead of taking the sum of Rs. 2,83,32,000/- paid by the respondents to M/s. Nagase Co., Japan for the supply of technical know-how in documents, a transaction value under Section 14 of the Act read with Rule 4 of the CVR, 1988, demanding duty amounting to Rs. 2,26,65,600/- with interest holding the goods liable for confiscation and for having rendered the goods liable for confiscation imposing penalty on the respondents-importers under Section 114A of the Act, as proposed in the show cause notice, is legally correct and proper or needs any revision. (b) Whether by an order passed under Section 129B of the Act, the Tribunal should modify the order passed by the Commissioner and pass an order treating the payment of Rs. 2,83,32,000/- as transaction value under Section 14 of the Customs Act, 1962 read with Rule 4 of the CVR, 1988 and demand duty of Rs. 2,26,65,650/- by invoking the proviso to Section 28(1) of the Act with interest under Section 28AB of the Act holding the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efundable option fee, subject Section 2.5 above, of nine hundred thousand U.S. dollars (US$ 9,00,000) to the bank account designated by NAGASE in two instalments i) the first of which shall be six hundred thousand dollars (US$ 6,00,000) and shall be paid within ten (10) days the date of this Option Agreement and ii) the second of which shall be three hundred thousand U.S. dollars (US$ 3,00,000) shall be paid after commencement of the demonstrations set forth in Section 4.3 but before SHASUN exercises its option hereunder. All bank and other charges required for the payments of the option fee shall be borne by SHASUN. The income tax paid on payment of the option fee to NAGASE hereunder shall be borne by NAGASE and shall be computed and paid in accordance with laws of India and any convention, treaty or other agreement between Japan and India for the avoidance of double taxation. And under Section 4 Feasibility study the following is stated in the option agreement. Upon receipt of the option fee, NAGASE shall disclose to SHASUN a part of the LICENSED TECHNOLOGY to the extent NAGASE considers necessary which includes the detailed S-Ibuprofen production process flow chart, anal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be demanded/recovered from those personnel. (f) No statements were recorded from the technical personnel who were reported to have brought the documents and it is not the case of the department that there was any mis-declaration. (g) The whole basis of the appeal is that the documentation referred to cannot be called as a book or a manual. 8. The learned Counsels appearing for the respondents reiterated the grounds taken in the cross-objection and sought for upholding the order of the Commissioner. 9. We have carefully considered the submissions made by both the sides and gone through the case records. We find that the short issue that arises for consideration in this appeal is whether the technical know-how brought by the respondents herein from M/s. Nagase Co., Japan can be treated as Manual in loose-leaf form as held by the Commissioner in the order impugned or the amount paid by the respondents to the foreign company should be treated as a transaction value in terms of Section 14 of the Customs Act, read with Rule 4 of the CVR, 1988. We find that the Commissioner has recorded a finding that under the agreement M/s. Nagase Co., Japan shall disclose a part of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ith binder) falling under heading 49 of the CET are exempted from payment of duty. In the light of the entry under Serial No. 10, we have to see whether the technical know-how in the form of loose leaf documents imported by the respondents herein from M/s. Nagase Co. of Japan can be classified as manual as held by the learned Commissioner of Customs. The Commissioner has held that since the documents in question were explaining the method of manufacture of S-Ibuprofen, they can be classified as manual in loose leaf-form and were eligible for exemption in terms of the said Notification. We find that the adjudicating authority has relied on the definition of manual which clearly defines as A book containing in concise form the principles, rules and directions needed for the mastery or an art, science, or skill . Whereas in the instant case, the subject goods are not in the form of a Book. Further, the respondents neither in the reply to the show cause notice nor during their personal hearing contended that the goods are classifiable as a book. In the present case it is an admitted fact that the goods were technical documents which were confidential in the form of loose leaf and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the words used by the Legislature cannot identify to be a product of technology transfer between two countries. Ordinary common parlance ought to be attributed for the expressions used by the Legislature and on attribution thereof one cannot possibly come to a conclusion that the Exemption Notification ever aimed at extending the meaning to the extent as has been effected by the Tribunal. The decision of this Court in the case of Scientific Engineering (supra) has been totally misread and misapplied in the contextual facts Scientific Engineering (supra) on the contrary lends all possible credence to the contentions as propagated by the appellants and not the Respondents. The decisions of this Court in the case of Collector of Central Excise, Baroda v. Indian Petro Chemicals, 1997 (92) E.L.T. 13 (SC) and HCL Limited v. Collector of Customs, New Delhi [2001 (130) E.L.T. 405 (SC)] do not in any lend any support to the contentions of the respondent herein by reason of the special fact situation as above and in any event we are not concerned with two notifications, one of which confers benefit on to the assessee. Thus, reliance thereon is totally misplaced in the facts of the matter u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Airport), whereas the appeal has been filed by the Commissioner of Customs, Chennai and hence it has no validity. We are unable to accept this plea inasmuch as in terms of Section 129(A)(2) of the Customs Act, 1962, the Commissioner of Customs, (Airport) has authorised the proper officer viz. Additional Commissioner of Customs, Review Cell (Air) to file an appeal before the CEGAT and the authorisation is on record. Based on the authorisation, the Additional Commissioner, Review Cell (Air) has signed the appeal proforma (CA. 5 form) as could be seen from page two of the said proforma (form CA 5). Simply because the typist who typed the CA. 5 form has omitted to mention within bracket the word Airport , after the word Customs on the first page of the CA. 5 form, will not make any difference so far as the present appeal is concerned. We therefore, reject the plea of the respondents in this regard. As regards the other plea taken by the respondents that since the goods were brought by the two officers of their Company, the liability to pay duty is on them. We find that this plea of the respondents have already been dealt with by the Commissioner in para 10 of the impugned order wher ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... how. He has also noted that M/s. Nagase, Japan entered into an Option Agreement with M/s. SCDL prior to actual Licence Agreement. Under this agreement, M/s. Nagase, Japan, shall disclose a part of the licence technology which includes detailed S-Ibuprofen production process flow chart, analytical method, mass balance and the specifications of fresh PBA, recycled PBA, and recemized ibuprofen etc. It also provided that M/s. Nagase shall conduct demonstrations that will verify the data. After total payment of US$ 9,00,000/-, another agreement called Licence Agreement was entered into by the two companies. He has noted that this indicates that the licence technology has already been disclosed to M/s. SCDL. However, they shall make further additional disclosure covering the standard operation procedure, which will be further supplemented during the training at M/s. SCDL. It also provided for training of M/s. SCDL employees by the employees of M/s. Nagase, Japan. It also provided that M/s. Nagase may give training to personnel of M/s. SCDL at M/s. Nagase factory or laboratory also. Further, it provided that M/s. Nagase will supply a resolving agent called PBA for the purpose of implement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ondents to produce necessary documents and the Commissioner shall record a detailed speaking order in terms of principle of natural justice. Ordered accordingly. Sd/-S.L. PeeranMember (J) POINTS OF DIFFERENCE In view of the difference of opinion between the Members, the following question arises for determination by Third Member :- Whether the Revenue s appeal is required to be allowed as held by Member (Technical) in his order ; (OR) the appeal is required to be allowed by remand for de novo consideration in terms of findings recorded by Member (Judicial) . Sd/-Jeet Ram KaitMember (T) Sd/-S.L. PeeranMember (J) 16. [Per : G.A. Brahma Deva, Member (J)]. - The short point to be considered in this appeal is whether the item Technical Know-how imported by the assessee is eligible for the benefit or not in terms of the Customs Notification No. 25/95, dt. 16-3-95. 17. On hearing the both sides with reference to the difference of opinion and on perusal of the records, I find that the Commissioner has decided the issue in favour of the assessee holding that the item in question is eligible for the benefit in terms of the Notifi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... meaning to the extent as has been effected by the Tribunal. The decision of this Court in the case of Scientific Engineering (supra) has been totally misread and misapplied in the contextual facts Scientific Engineering (supra) on the contrary lends all possible credence to the contentions as propagated by the appellants and not the Respondents. The decisions, of this Court in the case of Collector of Central Excise, Baroda v. Indian Petro Chemicals, 1997 (92) E.L.T. 13 (S.C.) and HCL Limited v. Collector of Customs, New Delhi [2001 (130) E.L.T. 405 (S.C.)] do not in any lend any support to the contentions of the respondent herein by reason of the special fact situation as above and in any event we are not concerned with two notifications, one of which confers benefit on to the assessee. Thus, reliance thereon is totally misplaced in the facts of the matter under consideration. In that case the Apex Court has held that the Legislature has also included Printed Manuals and explained it by express words including those in the loose leaf form with binder . Whether the impugned item is in conformity with the observations made by the Supreme Court in the aforesaid case requires t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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