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TMI Blog1997 (2) TMI 101X X X X Extracts X X X X X X X X Extracts X X X X ..... o that extent would form part of the project import and must be valued on par with the said plant, that is to say that the rate of exchange which is applied in respect of the said plant must also be applied to this percentage of the spares. Appeal allowed. - 4439 of 1990 - - - Dated:- 18-2-1997 - S.P. Bharucha and S.B. Majmudar, JJ. [Judgment per : S.P. Bharucha, J.]. - This is an appeal against the judgment and order of the Customs, Excise and Gold (Control) Appellate Tribunal and it concerns the assessment of project imports for the purposes of Customs duty. 2.Prior to the introduction of Item 72A in the earlier Customs Tariff, individual imports, though intended for a single project, were separately assessed to Customs duty. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ustry that the Government had approved the import by the appellants of the aforesaid capital goods for the production of DMT for the CIF value of US $ 17 million. It was noted in the said letter that the appellants would be incurring as dismantling charges the cost of US $ 5.50 million for which necessary clearance from the Reserve Bank should be obtained. On 21st May, 1979, the Deputy Secretary in the Ministry of Petroleum, Chemicals and Fertilizers required the appellants to furnish a certificate from a firm of Chartered Engineers regarding the soundness and reliability of the aforesaid plant before incurring any expenditure for its purchase. On 1st August, 1981, the Under Secretary in the Department of Economic Affairs in the Ministry of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ovisions of Section 14 of the Customs Act to the valuation of the said plant for the purposes of Customs duty. The Tribunal did not accept the argument that the registration of the said contract by the Customs in terms of the said Regulations amounted to pre-assessment of the value of the said plant. It accepted the argument on behalf of the Revenue that there had only been a provisional assessment and it was open to the Collector to value the said plant on the basis of Section 14. 5.Before us it was accepted that there had been only a provisional assessment at the stage when the said contract was registered under the said Regulations, but it was submitted that once the value of the said plant was determined at US $ 17 million and the sai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncorporated for misc. expenses such as equivalent transport, copying, telephone, telex, postage, legal expenditure. 265018 5500738" 8.After some debate, learned Counsel for the appellants fairly stated that he could not contest the addition of dismantling, packing and forwarding charges in Item No. 1 above; and "Insurance in USA", being Item No. 4 above, because these expenses arose upon the terms of the said contract. 9.The amount relating to inspection in Item No. 1 above is US $ 1.048 million. It was submitted by learned Counsel for the appellants that these inspection charges could not be included in the assessable value of the said plant as the inspection was optional. It did no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ture on this inspection should not have been taken into account for the purposes of arriving at the assessable value of the said plant. 11.Learned Counsel for the appellants submitted that the expenditure incurred on "Insulation removal" (Item 3 above) should also not have been taken into account for the purposes of arriving at the assessable value of the said plant. Under the terms of Clause 4 of the said contract it was the obligation of the appellants, at their own cost and expense, to make all arrangements and perform all work, themselves or through agents or contractors of their choice, necessary to effect dismantling, packing, removal and shipment of the said plant from Burlington, New Jersey. The said plant as installed was insulat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e) and reimbursed them for the expenditure which they had actually incurred (Item 6 above). Learned Counsel for the appellants submitted that the payment of the fees of M/s. Tata Inc. was payment for rendering a service and could not be taken into account in arriving at the value of the said plant. Attention was drawn to the judgment of this Court in Apollo Tyres Ltd. v. Collector of Customs - 1997 (89) E.L.T. 7 (to which one of us was a party) where it was held that the commission or remuneration payable to a purchasing agent did not enhance the value of the items purchased. The same reasoning, it was submitted, applied to the fees of M/s. Tata Inc. and the reimbursement to them of actual expenses. Learned Counsel for the Revenue, fairly, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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