Custom, Excise & Service Tax Tribunal
Sempertrans Nirlon Pvt. Ltd vs Commissioner Of Customs (Import) on 7 January, 2013
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL,WEST ZONAL BENCH AT MUMBAI COURT No. II APPEAL No.C/928/12 (Arising out of Order-in-Appeal No.430/MCH/AC/SVB/2012 dated 29/05/2012 passed by Commissioner of Customs (Appeals) Mumbai) For approval and signature: Honble Mr. P.R. Chandrasekharan, Member (Technical) Honble Mr. Anil Choudhary, Member (Judicial) 1. Whether Press Reporters may be allowed to see :No the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? 2. Whether it should be released under Rule 27 of the :Yes CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? 3. Whether Their Lordships wish to see the fair copy :Seen of the Order? 4. Whether Order is to be circulated to the Departmental :Yes authorities? ========================================
Sempertrans Nirlon Pvt. Ltd., Appellant Vs. Commissioner of Customs (Import), Respondent Mumbai Appearance:
Shri.P.George Varghese, Advocate for appellant Shri.Amand Shah, Addl. Comm. (AR), for respondent CORAM:
Honble Mr. P.R.Chandrasekharan, Member (Technical) Honble Mr.Anil Choudhary, Member (Judicial) Date of Hearing : 07/01/2013 Date of Decision : 07/01/2013 ORDER NO Per: P.R.Chandrasekharan
1. The appeal is directed against order-in-appeal No. 430/MCH/AC/SVB/2012 dated 29/05/2012 passed by Commissioner of Customs (Appeals) Mumbai-I.
2. The appellant, M/s.Sempertrans Nirlon Pvt. Ltd., Roha, was registered with Special Valuation Branch at Mumbai Customs House. They imported conveyor belts of various specifications along with accessories from M/s.Semperit France Belting Technology, France and Poland under six Bills of Entry during the period March 2008 to June 2009. The importer and the foreign suppliers are related parties inasmuch as the importer is a joint venture company of Semperit Aktiengesellschaft Holding a Public Limited Company incorporated and existing under the laws of Austria and the foreign supplier is an associated company of the company in Austria and they are part of the same group of companies. The import made by the appellant was examined by the Valuation Cell, Mumbai and it was noticed that the prices declared in respect of impugned imports were comparable with the price declared for such supplies made to buyers located in other countries, such as Pakistan, Chile and Argentina. It was noticed that the price declared in the impugned imports by the appellants are much higher than the price for similar goods supplied to buyers in other countries. Accordingly, the assessing authority came to the conclusion that the relationship between the suppliers and the Indian importer has not be influenced transaction price; therefore, the transaction value can be accepted. The revenue filed an appeal against the said order before the Commissioner (Appeals) on the ground that there is a technical assistance, trade mark and royalty agreement between the appellants and their principal in Austria as per which the appellant is required to pay royalty to their foreign principal and, therefore, the payment of royalty has influenced the supply price in the instant case. The said appeal was considered by the lower appellate authority, who held that the appellant had also imported capital goods from their parent company and are utilizing the technology/know-how by paying royalty for the same and therefore, the adjudicating authority has wrongly concluded that the relationship has not influenced the price. Accordingly, the lower appellate authority set aside the order of the assessing authority and allowed the departments appeal. Hence, the appellant is before us.
3. The Ld. Counsel for the appellant submits that the technical assistance, trade mark and royalty agreement entered into by the appellant with their foreign principal is for the manufacture of textile reinforced conveyer belts to be manufactured in India by the appellants and the royalty payments are made for the said technical know-how as a percentage of the domestic sales/export of the product. This has nothing to do with the import of conveyer belts by the appellant from their associate company in France, as these are two entirely different transactions. Further, the price at which the goods have been supplied to the appellant company compare favourably with similar goods supplied by the same supplier in France to other importers in other countries, such as, Pakistan, Argentina and Chile. Therefore, it cannot be said that their relationship has influenced the price. He also relies on the decision of the Honble apex Court in the case of CC, New Delhi Vs. Prodelin India (P) Ltd., reported in 2006 (202) ELT 13 (SC) in support of his above contention.
4. The Ld. Addl. Commissioner (AR) appearing for the revenue reiterates the findings of the lower appellate authority.
5. We have carefully considered the submissions made by both the sides.
5.1 The technical assistance, trade mark and royalty agreement entered into between the appellants and their foreign principal is for the manufacture of conveyor belts in India by the appellants and also for using the trade mark of the foreign principal at the time of marketing such manufactured goods. In consideration for the provision of know-how and grant of license, the appellants are required to pay royalty@ 3% for net domestic sales and for export. In other words, the royalty payments are made for the transfer of technical know-how for the conveyor belts manufactured in India by the appellants. This is an independent transaction and has nothing to do vis-`-vis the import made in this case which is from an associate company in France. Further, the assessing authority has compared the price of imports with the supply price in respect of similar goods made by the same supplier to other importers in nearby countries such as Pakistan, Argentina, Chile and after finding that the price declared is on the higher side when compared to supply prices elsewhere, he has accepted the transaction value. Further as per the decision of the Honble apex Court in the Prodelin case (supra), merely because the importer and the foreign supplier are related persons, the transaction value cannot be rejected and the onus to prove that the declared price did not reflect true transaction value is always on the department and in the absence of any evidence that identical or similar goods imported by other importers are at higher price, the department is bound to accept the transaction value. The ratio of the above decision applies squarely to the facts of the case. There is no evidence led by the department to show that the transaction value declared by the appellant has been influenced by the relationship between the foreign supplier and the appellant importer. Further, evidences available on record show that the prices declared are comparable with prices of similar supplies made to importers in other countries. Thus, we do not find any reason to reject the transaction value declared by the appellants. Accordingly, the impugned order is set aside and the order of the lower assessing authority is restored.
6. The appeal is allowed in the above terms.
(Operative part of the order pronounced in Court) (Anil Choudhary) Member (Judicial) (P.R. Chandrasekharan) Member (Technical) pj 1 6