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TMI Blog2014 (11) TMI 617X X X X Extracts X X X X X X X X Extracts X X X X ..... he show cause notice. That apart, the Commissioner was not called upon to adjudicate on that issue as to whether the assessment is provisional or otherwise. We find that the Tribunal erred in considering such new plea and coming to the conclusion that there was no case of misstatement or suppression. The order of the Tribunal, in the light of the law laid down in the decisions of the Supreme Court, referred supra, requires to be rectified. - Matter remanded back - Decided in favour of assessee. - C.M.A. No. 2379 of 2006 - - - Dated:- 7-11-2014 - R. Sudhakar And R. Karuppiah,JJ. For the Appellant : Mr. P. R. Renganath for M/s. R. Raghavan For the Respondents : Mr. E. Vijay Anand Standing Counsel for 2nd respondent JUDGMENT (Delivered by R. Sudhakar,J.) This appeal is filed by the assessee against the Final Order No.950 of 2005, dated 7.7.2005 passed by the Customs, Excise and Service Tax Appellate Tribunal, South Zonal Bench at Chennai, raising the following substantial questions of law: (a) Whether the Tribunal can go beyond the scope of the show cause notice and the Order-in-Original No.61/2001-CAU, dated 16.3.2001 of the second respondent to hold that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lant replied to the show cause notice and inter alia contended that: (i) they have fulfilled the export obligation and achieved exports much beyond the requirement of the EPCG license; (ii) the technical know-how fees is not to be included in the assessable value; and (iii) there is no element of suppression or mis-statement. 2.5. The defence taken by the assessee was rejected and the Original Authority came to the conclusion that the technical know-how fee charges paid by the appellant to M/s.Brazilian Food Project, Brazil should be included in the assessable value. On the quantum of technical know-how fees includable in the assessable value, partial relief was granted in favour of the appellant. The Commissioner held that there was no suppression of fact, but only willful mis-statement. While adverting to proviso to Section 28(1) of the Customs Act, the Original Authority gave a finding as follows: 37. The notice alleged that neither the fact of technical know-how nor collaboration agreement, nor the equity participation, nor the relationship, nor the payment of US$ 2,88,000 was brought to the notice of the Customs authorities at the time of import. Therefore, the notice a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly). To this extent I hold that there is mis-declaration of value and hence the imported equipment covered by the Bills of Entry is liable to confiscation under Section 111(m) of the Customs Act 1962. In view of the fact that the duty is being demanded on account of willful mis-statement of value stemming out non-declaration and mis-declaration thereof, I hold that the importer is also liable to penalty under Section 114A to the extent of duty sought to be evaded. As a result, a duty demand was made under proviso to Section 28(1) of the Customs Act in the following manner: 41. I find that the duty determined as demandable under Section 28(1) proviso thereof is ₹ 15,38,062/-. The said amount may be collected against the last bill of entry cleared through this port i.e., B/E No.23810/18.5.95. I am also endorsing a copy of this order to the Commissioner of Customs, Mumbai so that there will be no need to initiate similar proceedings against four bills of entry cleared through Mumbai Customs on this issue. On the basis of the above finding, the Original Authority passed the following order: 43.1. I hold that US$ 1,30,000 being part of lump-sum know-how payment is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... FP to the appellants. Therefore, according to the Counsel, the know-how fee is not addable to the transaction value for determination of the assessable value. Ld. Counsel has also relied on a line of decisions of the Tribunal, some of which are listed below. 1. M/s. S.D. Technical Services v. CC, New Delhi, 2003 (155) ELT 274 (T-LB) - 2003 (56) RLT 962 (CEGAT-LB). 2. M/s Polar Marino Agglomerators Ltd. v. CC, 2003 (155) ELT 283 (T-LB) - 2003 (56) RLT 967 (CEGAT-LB). 3. M/s. Panafa Dongwon India Ltd. v. CC, 2003 (155) ELT 287 (T-LB) - 2003 (56) RLT 962 (CEGAT-LB). 4. M/s. Hoerbiger India Pvt. Ltd. v. CC, Mumbai, 2003 (156) ELT 62 (T-LB) - 2003 (56) RLT 965 (CEGAT-LB). Ld. DR has argued that it would appear from Clause-II of the Technical known-how Agreement that there is a connection between the imported goods and the know-how fee in this case. He has also relied on the Supreme Court's judgment rendered in the case of CC. v. Essar Gujarat Ltd. [1996 (88) ELT 609 (SC)]. 4. It was submitted by Counsel that the capital goods and the technical know-how had been supplied by BFP under separate invoices against separate orders placed by CCL and, therefore, the import ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... us, the second condition under Rule 9(1)(c) was also satisfied in this case. 5. Facts of the cases cited by Ld. Counsel are distinguishable from those of this case. In the case of S.D. Technical Services (supra), it was found from the terms of the collaboration agreement that the technical know-how transferred thereunder was related to the capital goods imported by the assessee from the supplier of know-how. In Polar Marmo Agglomerates (supra), the terms of the relevant agreement were examined and it 'was found that payment of know-how fee was not a condition of sale of the plant and machinery imported by the assessee. In Panalfa Dongzvon India (supra), a lump sum royalty which, was payable by the assessee to their technical collaborator who supplied a capital equipment was found to have no connection with the import of the equipment. This finding was recorded after a study of the relevant agreement. In Hoerbiger India case, no payment of lump sum royalty or know-how fee was involved. The subject matter of dispute was a running royalty which was payable by the assessee (to their collaborator) as a percentage of the net selling price of their product manufactured and sold i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in question. 2.7. The next question the Tribunal dealt with was whether the extended period of limitation under the proviso to Section 28(1) of the Customs Act is invocable to demand duty on the value addition in this case. For this, the Tribunal takes a new plea in paragraphs (7) to (9) of the impugned order, which we extract as such for better clarity: 7. We observe that the capital goods under EPCG scheme were imported through Chennai Customs House and through Sahar Air Cargo Complex, Mumbai. The importers filed 17 bills of entry seeking clearance of the goods, 13 of them at Chennai and 4 at Mumbai. The triplicate copies of the bills of entry filed by the appellants indicate that the assessments were provisional. The appellants have not averred that these bills of entry were finally assessed. The learned DR also does not aver that the goods were finally assessed. In the light of these facts as they emerged from the records of the case, we hold that the assessments were provisional. As the assessments were provisional, the limitation under Section 28 does not arise. In fact a notice under Section 28 could not have been issued when the assessments were provisional. 8. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en by the Department and the finding rendered by the Original Authority, we fail to understand as to how the Tribunal could have taken a new plea to decide the issue that the assessment was provisional and as a consequence, hold the question of limitation does not arise. As to whether the assessment was provisional or final is a pure question of fact which the Tribunal ought not to have raised, at the first instance, before it and it was neither the importer's plea nor department's plea. 5. The rectification petition filed by the appellant on this issue of assessment also came to be dismissed by the Tribunal holding that in a case which involves assessments of bills of entry and in which demand of duty is contested on limitation, it is open to the Tribunal to find out whether the assessments were provisional or not, even if it is not adverted to in the show cause notice. Paragraph (2) of the rectification order is also extracted hereunder for better clarity: 2. Admittedly, the case was one involving assessment of several bills of entry covering import of machinery and also one in which the demand of duty assessed was raised beyond the normal period prescribed under S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... venue a case which the Revenue had never canvassed and which the appellants had never been required to meet. 18. The impugned order of the Tribunal which had gone beyond the show-cause notice and the order of the respondent Collector is, therefore, liable to be set aside. (emphasis supplied) For coming to the above said conclusion, the Supreme Court relied upon an earlier decision of the Supreme Court in Reckitt Colman of India Ltd. v. CCE, (1997) 10 SCC 379, in which decision also it has been clearly held that it is beyond the competence of the Tribunal to make out a case in favour of the Revenue which the Revenue had never canvassed and which the assessee had never been required to meet. 7. Similar view was taken by the Supreme Court in Sanghvi Reconditioners Private Limited v. Union of India and others, (2010) 2 SCC 733, where the Court held that even though an additional ground/new ground on admitted facts can be entertained, if such additional ground/new ground involves any investigation into facts, then it cannot be permitted to be raised. 8. In the present case, as to whether the assessment is provisional or final is a pure question of fact. That was not th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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