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TMI Blog2014 (11) TMI 612X X X X Extracts X X X X X X X X Extracts X X X X ..... in respect of advance amount received and duty paid, the imposition of penalty cannot be sustained. Accordingly, we set aside the penalty in respect of this alone. When contract produced for supply of basic design and engineering, drawings and supervision of erection, etc., one is as much a part and condition of the contract as the other and addition of these charges to the assessable value is sustainable - no segregation of supervision cost, local material cost, local engineering cost have been made. At the same time, there is also no indication that the design and engineering cost does not include the basic design and engineering, cost of the equipment supplied. Prima facie, we do not find any merit. In respect of design and engineering charges and technical supervision charges, we find that it is always a disputable item and requires interpretation of the agreement, application of valuation rules and unless there is evidence to show that such agreement was deliberately forged and was not part of the contract for supply of equipment or it was not declared at all and there was a considerable effort to hide the fact of payment of such charges, it may not be appropriate to imp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eering from M/s. Sinosteel through courier. The complete machine was imported in 5 consignments under different bills of entry at the port of Haldia and Visakhapatnam. 2. For the imports made at Haldia, the appellants filed bill of entry on 1.10.2007 at Kolkata Port for import of sinter machine for sinter plant. The bill of entry was assessed on the value declared and the consignment was allowed to be cleared on payment of appropriate duty on the value declared by the appellants. The second bill of entry was filed by the appellants on 12.10.2007 at Kolkata for the clearance of second clearances of the plant. In the second bill of entry, the goods were described as one complete set of sinter machine. The third bill of entry was filed on 27.2.2008 for clearance of third consignment. Subsequently, fourth consignment was imported by filing the bill of entry on 1.4.2008 and the fifth bill of entry was filed in Visakhapatnam for the fifth and final consignment of the plant. 3. During the scrutiny of documents at the docks in respect of bill of entry filed on 12.10.2007, customs authorities took a view that it appears from the contract between the parties that there was separate c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entry and submitting the documents this got left out. It has to be noted that the appellants never concealed any fact from the Department and as soon as they were asked to furnish documents, they submitted all the documents such as contracts and detailed agreements, etc. when the documents were received, the department objected that design and engineering charges also should suffer duty and this was also paid by them with interest and it is the appellants submission that appellants did not even wait for all the clearances to take place even though the design and engineering charges were being paid in installments and not exactly lumpsum and when the duty was paid, the amount had not yet been paid in full to the supplier. He submits that this shows bona fide nature of the appellants transaction and the appellants intention to abide by the law. Prima facie, we are satisfied with the submissions even though the learned AR opposed this strongly and drew our attention to paragraph 25 and 26 of the order-in-original. However, we find that the facts remains that the advance amount received by the appellant was accepted as part of the consideration without any objection and without any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te the process within battery limit is under the scope of seller supply . This shows that the agreement was a turnkey project which included design and engineering work related to equipment as well as erection, commissioning and installation of the plant. The learned Commissioner has relied upon the decision of the Hon ble Supreme Court in the case of Mukund Ltd.: 2000 (120) E.L.T. 30 (SC). In this case, Hon ble Supreme Court held that when contract produced for supply of basic design and engineering, drawings and supervision of erection, etc., one is as much a part and condition of the contract as the other and addition of these charges to the assessable value is sustainable. After going through the agreement in detail, we also find that in this case also the situation is similar to the one under consideration by the Hon ble Supreme Court, no segregation of supervision cost, local material cost, local engineering cost have been made. At the same time, there is also no indication that the design and engineering cost does not include the basic design and engineering, cost of the equipment supplied. Prima facie, we do not find any merit. 6. As regards technical supervision also, t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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