Custom, Excise & Service Tax Tribunal
M/S. Lumax Samlip Industries Ltd vs Commissioner Of Customs, Chennai on 16 June, 2016
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
SOUTH ZONAL BENCH, CHENNAI
C/00321/2004
[arising out of Order-in-Appeal C.Cus. 5309/2004, dated 30.04.2004 passed by the Commissioner of Customs (Appeals), Chennai]
M/s. LUMAX SAMLIP INDUSTRIES LTD.
APPELLANT
Versus
COMMISSIONER OF CUSTOMS, CHENNAI
RESPONDENT
Appearance:
For the Appellant Shri C. Saravanan, Adv.
For the Respondent Shri R. Chandrasekhar, AC (AR) CORAM:
Honbe Shri D.N. Panda, Judicial Member Honble Shri B. Ravichandran, Technical Member Date of hearing/decision 16-06-2016 FINAL ORDER NO. 41011 / 2016 Per B. Ravichandran:
Appeal is against order dated 30.04.2004 passed by Commissioner of Customs (Appeals), Chennai. Appellant entered into an agreement with M/s. Samlip Industrial Co. Ltd., Korea for manufacture of various licensed products in terms of agreement dated 06.05.1997. They have imported mounting pipes and insulators which are used for manufacture of mounting. Since the transactions are between related persons proceeding under Special Valuation Scheme were followed. On conclusion of the proceedings, the original assessing authority concluded that technical information and knowhow fee of USD 2.1 lakhs paid by the appellant to the exporter should be added to the transaction value in terms of Rule 9 (1) (c) of the Customs Valuation Rules, 1988. On appeal, the Commissioner (Appeals) vide the impugned order upheld the said findings. Aggrieved, the appellant is before us.
2. The learned counsel for the appellant submits that the agreement is clearly for obtaining technical-knowhow for the manufacture of various licensed products like head lamps, fog lamp, tail lamp etc., which are later to be supplied to M/s. Hyundai India. A technical-knowhow fees is not a condition for import of the impugned goods and there is no nexus in the import transaction with the manufacturing based on technical-knowhow. He further submitted that despite the submission of all related documents, the original authority as well as appellate authority came to a summary conclusion without examining all documents.
3. Learned Authorised Representative strongly opposed the plea of the appellant by stating that the imported raw materials are very much required for manufacturing the licensed products. Such imperative nature of the imported items necessarily leads to the conclusion that the condition of such sale and import is relatable to transfer of technical-knowhow for the manufacture of licensed products. He supports the finding of the lower authority.
4. Heard both sides and examined the appeal records.
5. The only point for decision is that the appellants liability for additional duty in view of loading of transaction value with technical information and know-how fee as stated above. We find that this issue was dealt by the original authority from para 9 of his order. The reasoning given is based on article 5.2 of the impugned agreement. The said article deals with fee to be paid for technology in manufacture of licensed product. The original authority concluded that the said article of agreement clearly shows the link between the imported items and the technical-knowhow fee. We are not able to find the detailed reasoning for such finding. Further, we find that the appellate authority while dealing with appellants appeal observed that the appellant had not made available the data required to ascertain the need for above such fee. The lower appellate authority further concluded that in the absence of actual information, it should be assumed that the supplier made exports to the appellant and such supply of raw material was contingent upon the payment of technical-knowhow fee. We are unable to appreciate such summary conclusion based on assumption. It is the case of the appellant that they have provided all the material record in support of their plea. However, we find the same was not recorded and the appellants failure to furnish the record has been concluded as reason for rejecting the appeal.
6. In the above circumstances, we are constrained to observe that the present impugned order cannot be sustained. The matter has to go back to the original authority to examine the issue afresh regarding the applicability of the provisions of Rule 9 (1) (c) of the then Customs Valuation Rules, 1988 to the facts of the present case. The appellant shall provide of the required documents along with the written submission in support of their case. Considering the long lapse of time, it is advisable that the original authority decides the matter within three months of this order. The appellant shall be heard before a reasoned order is passed. The appeal is allowed by way of remand.
(Dictated and pronounced in open court)
(B. RAVICHANDRAN) (D.N. PANDA)
TECHNICAL MEMBER JUDICIAL MEMBER
ksr
13-06-2016
DRAFT
Remarks
I
II
III
Date of dictation
13.06.2016
Draft Order - Date of typing
Fair Order Typing
13.06.2016
Date of number and date of dispatch
17.06.2016
6
C/00321/2004