Customs, Excise and Gold Tribunal - Mumbai
Indian Toners And Developers Ltd. vs Cc on 3 May, 1999
Equivalent citations: 1999(85)ECR806(TRI.-MUMBAI)
ORDER A.C.C Unni, Member (T)
1. The Commissioner (Appeals) in the impugned order held as under:
Personal hearing was accorded to the importer (Respondent). Mr. S. Venkatrama Iyer, Advocate, Mr. N.S. Sharma, Tech. Director and Mr. M.K. Gambhir, Company Secretary attended personal hearing on behalf of the respondents. I have gone through the records of the case and submissions/Cross objections made by the respondents, both oral and written. I find that Department has a case in appeal on the following grounds:
(i) Agreements contain technical know-how agreements. Hence the loading of invoice value is required to the extent of payments made for know-how in terms of Rule 9(1)(b) (iv).
(ii) Chartered Accountant's Certificate dated 9.7.1993 states that M/s Indian Toners & Developers Ltd., New Delhi had paid technical know-how fees equivalent to Rs. 93,00,179/- and Rs. 29,55,555/- was to be paid further.
(iii) Letter from M/s Indian Toners & Developers Ltd. dated 9.7.1993 addressed to Asstt. Commissioner of Customs, SVB speaks of technical know-how agreements with M/s ELFOTEC A.G. Switzerland. The said letter states that lumpsum know-how fees payable and paid to M/s ELFOTEC included process know-how fees besides plant know-how fees as well.
The review order was passed on 5.7.1994 by the Commissioner of Customs. The impugned order-in-original was dated 19.7.1993. The said review order was passed within the expiry of one year period from the date of decision/order of adjudicating authority. In terms of Section 129(D)(4) of Customs Act, 1962, the said appeal is filed by the lower authority within the period of three months from the date of communication of order (order was communicated on 21.11.1994) to the adjudicating authority.
In view of above observations, I find that impugned order passed by lower authority is not legal and proper and hence I set aside the impugned order and direct the lower authority to reconsider the case on merits after giving proper opportunity to the respondent. With this direction, the departmental appeal is allowed.
2. Appellants have argued that the ground taken by the Department in its appeal against the order of the Assistant Commissioner pleading that the loading of invoice value is required to the extent of payments made for know-how in terms of Rule 9(1)(b) (iv) was not maintainable at all since the said rule is not attracted in the facts of the appellants' case. More importantly, learned Counsel for the appellants argued that as would be apparent from the impugned order, the Commissioner (Appeals) has simply accepted the Department's grounds of Appeal without giving reasons for doing so. He submits that the order of Commissioner (Appeals) thus shows total lack of application of mind. He seeks the setting aside of the order for this reason alone if not on merits of the case.
3. Briefly, the facts relating to the appeal are that the appellants had entered into three agreements with M/s Elfotec - AG, a Swiss Corporation namely:
(a) Licence Agreement
(b) Agreement for supply of Plant and Equipment.
(c) Technical Services.
Under the licence agreement which contemplated supply of know-how to produce dry toners and developers for use in Plain paper copiers and Laser printers, a lumpsum licence fee of SF 7,00,000 was provided as the consideration for the know-how provided to manufacture 5 types of toners and developers in India by the appellants. Know-how for these products included supply of detailed description of the manufacturing processes, process flow diagrams, equipment summary, toner developer formulations, Vendor specifications of chemicals, etc. Under the second agreement for supply of Plant and equipment, various equipment and machinery were supplied for a consideration of SF 40,76,000. The importers sought registration of the contracts under the Project Import Regulations, 1986 and the goods imported were cleared provisionally after loading the transaction value by 9%. By order dated 9th July, 1993 the Assistant Commissioner GATT Valuation Branch, Bombay ordered that the lumpsum payment for technical know-how was not required to be added to the value of plant and equipment as it was neither for patent or trade mark or for royalty. The Department took up the matter in appeal before Commissioner (Appeals) and took the ground, among others, that the agreement contained technical know-how and therefore loading of invoice value is required to the extent of payment made for that purpose in terms of Rule 9(1)(b)(iv). The Commissioner (Appeals) by the impugned order (paragraph 6 to 8 extracted above) held against the present appellants.
4. Learned JDR concedes that the impugned order does not give any specific finding on the ground taken by the department in the appeal before the Commissioner (Appeals).
5. On a perusal of the record and on consideration of the submissions made before us by learned Counsel for appellants, we find that the impugned order does suffer from non-application of mind on the part of the Commissioner (Appeals) relating to the Grounds of Appeal taken by the Department. Paragraph 6 of the order simply reproduces the said Grounds of Appeal. There is nothing in the succeeding paragraphs 7 and 8 by way of any discussion leading to the acceptance by the Commissioner (Appeals) of any or all of the merits of the Grounds taken. In these circumstances, we are of the view that the matter requires to be remanded to the Commissioner (Appeals) for recording his considered views on the Grounds taken by the Department in the appeal filed before him.
6. Accordingly, we remand this matter back to the Commissioner (Appeals) for recording detailed and considered reasons for accepting/not accepting the Grounds taken by the Department in the Appeal filed before him after giving an opportunity to the present appellants to make their submissions including the submissions relating to applicability of Rule 9(1)(b)(iv).
7. Appeal is allowed by way of remand in the above terms.