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TMI Blog2019 (12) TMI 196X X X X Extracts X X X X X X X X Extracts X X X X ..... C has been agreed to as per the formula, viz., the cost of coal, taxes, expenses etc. plus ₹ 34.00 per MT towards service charges of the respondent - In terms of Section 14 of the Customs Act, 1962, as amended w.e.f. 2007, the transaction value of the goods i.e. the price actually paid or payable for the goods when sold for export to India shall form the assessable value. In this case, such transaction value is the price at which the overseas supplier has supplied the goods to the respondent - There is nothing on record to show that the respondent has passed on ₹ 34.00 per MT which they received as service charges for their services, either directly or indirectly, to the overseas suppliers. In fact, there is no such allegation at all in the order of the original authority - there is no evidence in the first place that the respondent had acted as a canalizing agent. In fact, coal is also imported routinely by various private parties also. The agreement only shows that it is a sale deed on principal to principal basis between NTPC and the respondent. There is nothing on record to show that any portion of the service charges have been passed on to the overseas supplier ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l as per the requirements of NTPC and supply it to them. The price at which the respondent would sell the coal to M/s NTPC is not a fixed amount but is decided as per the following formula: A. Coal Price (Port based) 1. C F Price (US Dollar rate per metric tonne (PMT) converted to Indian Rupees on the basis of applicable exchange rate) arrived at as detailed in the Pricing Methodology. B. Fixed Component: (Port based) 1. Stevedoring, Handling, Clearing Forwarding charges. 2. MMTC s Service Charges (Margin) @ ₹ 34/- per MT. C. As per Actuals: 1. Customs Duty. 2. Railway Freight 3. Insurance Charges 4. Sales Tax/VAT and other statutory duties. 5. Port Charges. 4. As can be seen, the price of the coal depends upon the price at which the respondent imports coal, relevant duties and taxes, freight etc. and a service charge of ₹ 34/- per MT. Revenue was of the opinion that the transaction in question amounts to high sea sales of coal between respondent and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -importation charges. (vi) As per Section 2 of the Customs Act, 1962, importer in relation to any goods at any time between their importation and the time when they are cleared for home consumption, includes any owner or any person holding himself out to be the importer. Thus, in the present case, NTPC is the actual importer of the goods. (vii) By no stretch of imagination can the respondent be called as the importer of the goods and hence the price at which the respondent was paid to the overseas supplier cannot be recorded as transaction value. (viii) It is a well settled issue that service charges to the canalising agent i.e. M/s MMTC is includable in the assessable value. They relied on the case laws of Hyderabad Industries Limited [2000(115)ELT 593 (S.C.)] and Usha Martin Limited [2007(216)ELT 122 (Tri.-Kolkata)]. 6. Ld. DR reiterates the above assertions in the appeal. 7. Ld. Counsel for the respondent submits as follows: a) Sale of goods by the respondent to NTPC is not executed on high sea sales and the price paid to them by M/s NTPC cannot be considered as transaction value fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion for BID along with bidding documents, issued vide letter ref. No. 01/CM/IMP COAL/2009 dated 16.03.2009. 9. As can be seen, the agreement only states that the respondent carries on the business, amongst others, of importing and selling coal. It is true that the respondent has imported coal for supply to NTPC only but they have imported it on their account and in turn sold it to M/s NTPC. It is also true that the price at which coal was sold to NTPC has been agreed to as per the formula, viz., the cost of coal, taxes, expenses etc. plus ₹ 34.00 per MT towards service charges of the respondent. In terms of Section 14 of the Customs Act, 1962, as amended w.e.f. 2007, the transaction value of the goods i.e. the price actually paid or payable for the goods when sold for export to India shall form the assessable value. In this case, such transaction value is the price at which the overseas supplier has supplied the goods to the respondent. There is nothing on record to show that the respondent has passed on ₹ 34.00 per MT which they received as service charges for their services, either directly or indirectly, to the overseas suppliers. In fact, there is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The sale of goods was not a high sea sales which was affected after clearing from the Customs. Otherwise, NTPC, the buyer would have filed the Bill of Entry and cleared the goods. The mere fact that the bids for import were finalised by the respondent (MMTC) after approval of NTPC, would not change the nature of transaction. There is no evidence that there is any privity of contract between the overseas supplier of coal and M/s NTPC. It is true that the definition of Importer under Section 2 includes the owner of the goods or anyone who holds himself out to be the importer but in this case no evidence is brought out that M/s NTPC are either the owner or have held themselves out to be the importer. This contention of the Revenue is completely baseless. The service charges paid to the respondent by M/s NTPC cannot, therefore, be included in the assessable value. 12. In view of the above, we find no force in the arguments of the department in the present appeal and we find that the impugned order is correct and calls for no interference. 13. The impugned order is upheld and the appeal is rejected. (Operative portion of the order pronou ..... X X X X Extracts X X X X X X X X Extracts X X X X
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