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TMI Blog2011 (3) TMI 315X X X X Extracts X X X X X X X X Extracts X X X X ..... ted to preŽdeposit is also unacceptable, because, taking credit would arise only when the duty is paid - n the present case, it is the case of the Revenue that the amount of US$ 45 million paid to Skoda under the Technology Transfer Agreement was in fact part of the value of 45,000 car kits supplied by Skoda to the petitioner from timeŽtoŽtime and that amount has been recovered from the customers by adopting different accounting methods - The writ petition is dismissed - However, the time to deposit the amount of Rs.30.00 crores is extended by further period of six weeks from today - 4776 OF 2010 - - - Dated:- 23-3-2011 - J.P. Devadhar, Smt.R.S. Dalvi, JJ. Mr.Rafiq Dada, Senior Counsel with Mr.Nirajnan Parekh and Mr.Prakash Shah with Mr.Sumit Raghani i/by Mansukhlal Hiralal Co. for the petitioner. Mr.M.I. Sethna, Senior Counsel with Mr.R. Ashokan for the respondents. JUDGMENT : (Per J.P. Devadhar, J.) 1. Rule. Rule returnable forthwith. By consent of parties, taken up for final hearing. 2.Although several reliefs are claimed in this writ petition, counsel for the petitioner has restrict ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsfer and Trade Mark Licence Agreement dated 01 10 2001 ( TTA for short). As per the TTA dated 01 -10 2001, the petitioner was liable to pay to the Skoda a lumpsum consideration of US$ 45 million in six different installments. Accordingly, payments were made to Skoda in instalments for providing technical assistance to the petitioner in setting up the manufacturing plant by deputing technical personnel, engineers and representatives from Skoda to India for training the petitioner s personnel on subjects like research, development production, quality, purchasing, information technology etc. 6. In the year 2002, a questionnaire was issued to the petitioner by the Department of Industrial Promotion and Policy ( DIPP for short) seeking information on technology imported by the petitioner. Since the raw materials required for manufacture of cars were imported from Skoda, a related person within the meaning of Rule 2(2) of the Customs Valuation (Determination of Price of Imported Goods) Rules, 1988 ( 1988 Rules for short), a detailed application was filed with the Special Valuat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from Skoda. The petitioner filed detailed reply denying all the allegations made in the show cause notice. 10. By an order in original dated 04 03 2009, the Commissioner of Customs confirmed the duty amounting to Rs.97,15,00,054/ and further imposed penalty in the equivalent amount under Section 114 A of the Customs Act, 1962. By the said order, penalty was also levied against the ex-Managing Directors as well as the Chartered Accountants of the petitioner. 11. Challenging the aforesaid order, appeals were filed before the CESTAT with an application seeking waiver of pre deposit. By the impugned order dated 12 05 2010, the CESTAT has directed the petitioner to make pre-deposit of Rs.30,00,00,000/ . Challenging the aforesaid order, present writ petition is filed. 12. Mr.Dada, learned Senior Advocate submitted that once the GATT valuation cell by its order dated 10 06 2003 held that US$ 45.00 million does not form part of the value of the car kits imported by the petitioner from Skoda, it was not open to the customs authorities belatedly seek to include the said amount in the value of the car kits importe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be proportionately around Rs.38.60 crores, the credit of which the petitioner is entitled to. Therefore, since Rs.42 crores (approximately) has been recovered as deposit, Rs.11.54 crores as service tax, demand of Rs.23.5 crores relates to the assessment which is yet to be finalized and the petitioner is entitled to the credit of CVD amounting to Rs.38.60 crores, Tribunal was not justified in directing pre deposit of Rs.30 crores. 16.Mr.Sethna, learned Senior Advocate appearing on behalf of the respondents submitted that the Tribunal, after analysing the decision of the Commissioner and after considering the material seized during the course of search, has by a reasoned order directed the petitioner to make pre-deposit of Rs.30 crores. He submitted that in view of the fraud practiced, the petitioner is not entitled to any relief in the present petition. 17. We have carefully considered the rival submissions. 18. The basic argument of the petitioner is that the amount of US$ 45.00 million paid to Skoda has been held by the Special Valuation Cell far back in the year 2003 as not relatable to the value of the car kits imported / to be imported by the petit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aid work sheet was prepared. h) Separate work sheet showing lower cost was prepared for the purpose of SVB is supported by different work sheets recovered during the course of search. i) Tribunal prima facie found that the Commissioner was right in holding that the CIF value of car kits in SKD / CKD condition is less than the cost accrued to Skoda. j) Pricing structure of car kits supplied to Croatia and Solvenia were entirely different. k) Petitioner being a 100% subsidiary of Skoda any profits made would go to Skoda and by claiming US$ 45.00 million as capital expenditure, the petitioner was to save income-tax as well as customs duty. l) the fact that transfer pricing file had a different work sheet showing different working and the work sheets in German language recovered shows a lumpsum payment of 1000 US$ goes to show that claim made before SVB that the value was not affected by the relationship and it was supplied on cost plus basis was obviously not correct. m)amount paid as per the TTA has been capitalized by petitioner. Once that amount is capitalized while allocating depreciation for the purpose of costs of the car assembled ..... X X X X Extracts X X X X X X X X Extracts X X X X
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