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TMI Blog2017 (11) TMI 170X X X X Extracts X X X X X X X X Extracts X X X X ..... ation" imported can be classified under Chapter 49 of CTH as claimed by the appellant or whether they are required to be classified along with the main plant and machinery and equipments imported for the project? - Held that: - We have then no doubt in our mind that the import of the Engineering Design and Technical Documentation are not for any post-import activity but are indispensible condition to the import of the main plant and equipment/machinery - once it has been established that the value of the Engineering, Design and Technical documents are required to be added to the assessable value of the related plant and machinery/equipment earlier imported, then each of such import will merit classification under Customs Tariff as that of the main import and we therefore are not able to find any infirmity in the change of classification ordered by the adjudicating authority. Redemption fine - Held that: - The goods have been confiscated under Section 111 (m) of the Act which ordains that any goods which do not correspond to in respect of value or in any other particular with the entry made under the Act shall be liable for confiscation. When imported goods have been evidently fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,00,000/- under Section 125 of the Customs Act, 1962. Penalty of ₹ 10,00,000/- was also imposed on the appellant under Section 112 (a) ibid. Hence Appeal No.C/554/2009. 4. In Appeal C/270/2009, the appellant had similarly imported goods declared as Design Engineering and Technical Documentation for 189M3 Sinter Plant vide Bill of Entry No.617838 dt. 23.05.08 goods were classified under CTH 49111090, claiming exemption under Notification No.21/2002-Cus. Sl.No.164. So also, vide Bill of Entry No.617835 dt. 23.05.08, they had imported the goods declared as Design Engineering and Technical Documentation for 178M3 Blast Furnace . The value of the said consignments were declared as US$ 600 and US$ 1120 respectively and the goods were classified under 49119990, claiming exemption under CN 21/2002. SCN dt. 31.07.2009 was issued to appellant inter alia proposing enhancement of declared values for Basic Engineering and Technical Documentation for Sinter Plant and Blast Furnace to ₹ 3,68,14,500/- (CIF) and ₹ 6,87,20,400/- (CIF) respectively, and reassessment of the goods under CTH 84198190 and CTH 84178090 respectively on par with classification of main equipment viz. Si ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... echnical and Engineering Documents is a precondition for the same equipment Sinter Plant and Blast Furnace etc. imported separately from the foreign supplier. (ii) Department has taken a view that supply of Design Engineering Drawings and Technical Documentations are conditional to same equipment. This premise is totally incorrect. (iii) On the other hand, Design Engineering Drawings and Technical Documents are required for installation of plant and machinery which is a post-import activity. (iv) In support of his argument, Ld. Advocate draws attention to para 3.8 of the contract entered into between the appellant and the Chinese supplier. As per para 3.8, All the detailed engineering and working drawings prepared / furnished by the Seller . Ld. Advocate's contention is that Engineering and Technical documents are meant only for installation of plant and machinery as is evident from para 3.8 of the contract. He draws our attention to the agreement in para 3.8 wherein the seller has agreed to deliver the detailed certified construction drawings for civil foundation works. (v) Ld. Advocate further draws our attention to page 5 of the contract wherein it has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... imported but will merit classification on their own premise. He relies upon the following case laws : 1. Gujarat Mineral Development Corpn. Ltd. Vs CCE Ahmedabad - 2000 (117) ELT 432 (Tribunal) 2. Gujarat Mineral Development Corpn. Ltd. v CCE Ahmedabad - 2005 (190) ELT 5 (SC) 3. CC New Delhi Vs Parasrampuria Synthetics Ltd. - 2001 (133) ELT 9 (SC) 4. CC (Port), Kolkata Vs J.K. Corporation Ltd. - 2007 (208) ELT 485 (SC) 5. CC Vs Ferodo India Pvt. Ltd. - 2008 (224) ELT 23 (SC) 6. CC (General) New Delhi Vs Gujarat Perstorp Electronics Ltd. - 2005 (186) ELT 532 (SC) 7. CC Mumbai Vs Kinetic Technology India Ltd. - 2016 (314) ELT 155 (Tri.-Mumbai) 7. On the other hand, ld. AR Shri B. Balamurugan supports the impugned orders. He submits that the Design Engineering and Technical Documentation imported by the appellant were very much concocted and pre-requisite for the import of the main plant and machinery. Ld. A.R further made the following submissions : 7.1 The contract dt. 17.04.2008 between the appellant and their foreign supplier in page 4 thereof clearly lays down that appellant is purchasing complete Design, Equipments, System ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as having been imported for subsequent post-import activity. (ii) Whether Engineering Design and Technical Documentation imported can be classified under Chapter 49 of CTH as claimed by the appellant or whether they are required to be classified along with the main plant and machinery and equipments imported for the project. 9.1 On the issue of enhancement of declared values, from the copy of the agreement available before us, it emerges that the agreement involves purchase of complete design, equipments, systems, technical services and training for Coke Oven plant and by-product plant project. The main outline of the agreement in Clause A B of the agreement at page 4 of the agreement attests to this : A. The Purchase has decided to purchase complete Design, Equipments, Systems, Technical Services Training for its 1 Million Ton Per Annum recovery type coke oven plant with CDQ and with by-poroducts plants for its Project which will be located at Bramhani Hills, Jammalamadug, Kadapa District, Andhra Pradesh, India in accordance with the terms conditions of this Contract. B. The Seller has agreed to sell complete Design, Equipments, Systems Technical Serv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ferodo India Pvt. Ltd. - 2008 (224) ELT 23 (SC), also cited by ld. Advocate, will not help their case since the Hon'ble Apex Court has categorically held therein that technical know how cost and payment of royalty is includible in price of imported goods if such payment constitutes a condition pre-requisite for supply of imported gods by foreign supplier, which ostensibly is the case herein. 9.7 The reliance of the Ld. Advocate on the ratio of the Hon'ble Supreme Court's judgment in Tata Iron Steel Co. Ltd. Vs CCE Bhubaneshwar - 2000 (116) ELT 422 (SC ) is also misconceived since therein the disputed charges (technical know-how) were covered by a separate contract and it was held by the Hon'ble Apex Court that it could not been included in the value of materials mixed up with the values of those documents which was referable to an equipment. However, in the case before us there is only one common and composite contract for which supply of design, engineering and equipment. 9.8 We further note that sufficient evidence has been unearthed by the department to establish that declared / invoice values were much lower than the actual price adopted by the ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the market price of the goods confiscated less in the case of imported good the duty chargeable thereon. 10.2 Accordingly, in respect of Appeal No.C/554/2009 (impugned order 803/2009 dt. 29.10.2009) the goods have been confiscated under Section 111 (m) of the Act. However, the importers have been given option to redeem the same for re-export on payment of fine of ₹ 70,00,000/- under Section 125 of the Act. Taking into all the facts of the matter into consideration, we order reduction of redemption fine to ₹ 10,00,000/- (Rupees ten lakhs only). So ordered. 10.3 In Appeal C/270/2010 (impugned order No.137/2010 dt. 27.2.2010), the impugned goods have been confiscated under Section 111 (m) and redemption fine under Section 125 ibid of ₹ 1,50,00,000/- has been imposed. We are of the opinion that reduced redemption fine of ₹ 25,00,000/- (Rupees Twenty five lakhs only) will sufficiently meet the interest of justice). So ordered. 10.4 In respect of Appeal C/271/2010, we note however that the offending goods had already been cleared out of customs charge and were not available for confiscation and their confiscation is not justified. As per the law laid dow ..... X X X X Extracts X X X X X X X X Extracts X X X X
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