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TMI Blog2011 (4) TMI 909X X X X Extracts X X X X X X X X Extracts X X X X ..... et the provisions of the agreements in his own way and to uphold the order-in-original - it appears that the learned Commissioner (Appeals) proceeded on the premise that the burden was on the importer to establish that the supplier did not impose any such condition - Assessee's appeal is allowed by way of remand - C/80/11 - - - Dated:- 29-4-2011 - Mr. P.G. Chacko, Mr. Sahab Singh, JJ. Shri Manoj Sanklecha, Advocate, for appellant Shri K. Lal, Authorised Representative (SDR), for respondent Per: P.G. Chacko The appeal is directed against an order of the Commissioner (Appeals) upholding an order of the Joint Commissioner of Customs (GATT Valuation Cell), who had ordered 100% enhancement over the assessable value declared by the appellant (assessee) in respect of the machinery imported from M/s. N.V. Bekaert SA, Belgium. The appellant is a joint venture company constituted under Joint Venture Agreement dated 5.9.2007 between M/s. N.V. Bekaert and M/s. Mukand Ltd. (a company registered in India under the Companies Act). M/s. N.V. Bekaert holds 50% stake in the joint venture (JV), the rest being held by the Indian company. The joint venture company (JVC), the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppellant for eliciting necessary information with a bearing on the assessment of the machines imported by them from Bekaert. The questionnaire was answered by the appellant. This was prior to start of imports. In answer to one of the queries, the appellant stated thus Royalty is payable @ 1% of net sales value to N.V. Bekaert but waived for first three years. Copy of board resolution is attached for waiver. After examining certain provisions of the Engineering Services Agreement and the Technology Agreement, the Joint Commissioner (GVC) held (1) that the appellant was related to the supplier (Bekaert) in terms of Rule 2(2) of the Customs Valuation (Determination of Value of Imported Goods) Rules; (2) that the declared invoice value for the goods imported by the appellant from Bekaert was liable to be enhanced to the extent of 100%; (3) that, if contemporaneous imports at higher prices were noticed in future in respect of identical goods, the assessment should be done appropriately under the said Rules and (4) that on expiry of a period of three years, the order would expire in the absence of any revision. On this basis, the Joint Commissioner (GVC) directed that assessments of mach ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or the appellant invites our attention to a provision contained in this Policy, which relates to new equipment and says that the transfer price of new equipment is equal to manufacturing cost with an uplift of 20% + design cost at 100%. A statement analyzing the price of one of the machines imported by the appellant from Bekaert was also enclosed with their letter dated 16.3.2009 ibid. The learned counsel has referred to yet another letter which was submitted by the appellant to the Joint Commissioner of Customs on 13.5.2009, wherein an explanation was offered to the original authority regarding the services which were liable to be provided to the appellant by Bekaert. This explanation/clarification was offered with reference to Articles 2 and 3 of the Engineering Services Agreement ibid. The learned counsel submits that the original authority did not take into account any of the above submissions in its findings. In other words, the order-in-original was passed without considering the submissions of the assessee. With regard to the impugned order of the Commissioner (Appeals), it is submitted that the appellant was heard on two occasions, viz. 11.3.2010 and 12.8.2010, by the learn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... herefore, after the impugned order was passed, the appellant, in a letter dated 5.1.2011, requested for a copy of the said written submissions as also for an opportunity of being heard with reference to the said written submissions. In that letter dated 5.1.2011, the appellant prayed for review of the order passed by the Commissioner (Appeals) and for passing fresh order after considering their submissions. The appellant, in letter dated 5.1.2011, alleged that principles of natural justice had been violated in their case. Subsequently, the appellant received a communication from the office of the Commissioner (Appeals) to the effect that the appellate authority being functus officio was unable to modify or review its order. In these circumstances, the learned counsel prays for setting aside the impugned order on the very ground of breach of natural justice. 5. The learned counsel has also adverted to the merits of the case. He has referred to the relevant provisions of the various agreements and has claimed that nothing contained in any of the agreements would warrant the proposition that the amounts paid by the appellant to Bekaert under the Engineering Services Agreement and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s to certain provisions of the Engineering Services Agreement and Technology Agreement. These comments are, by and large, in the nature of submissions in justification of the impugned order. 8. After giving careful consideration to the submissions, we are convinced that natural justice was denied to the appellant. The learned Joint Commissioner of Customs ordered enhancement of the assessable value to the extent of 100% without any meaningful consideration of the provisions of the relevant agreements and without taking into account any of the submissions of the assessee. We have already referred to a few letters submitted by the assessee to the original authority clarifying the pricing policy of Bekaert and its impact on the assessable value of the imported goods. In some of those letters, the assessee explained/clarified certain provisions of the agreements. None of these submissions was considered in the order-in-original. The Joint Commissioner s order recommending provisional assessment for the future and finalization of assessments of past imports on the above basis was of serious consequences for the assessee. The learned Commissioner (Appeals), however, appears to have o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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