Custom, Excise & Service Tax Tribunal
Carl Zeiss India Pvt Ltd vs The Principal Commissioner Customs ... on 13 July, 2023
C/23/2010
CUSTOMS EXCISE & SERVICE TAX APPELLATE TRIBUNAL
1st Floor, WTC Building, FKCCI Complex, K. G. Road,
BANGLORE-560009
COURT-I
CUSTOMS APPEAL NO. 23 OF 2010
[Arising out of the Order-in-Appeal No.122/2009 dated
25.09.2009 passed by the Commissioner of Customs (Appeals),
Bangalore.]
M/s. Carl Zeiss India Pvt Ltd ....Applicants
No.22, Kensington Road,
Ulsoor,
Bangalore - 560 008.
Vs.
The Commissioner of Customs ....Respondents
C.R. Building, Queen's Road, Bangalore - 560 001.
Appearance:
Ms. Neetu James, ....For
Advocate Applicants
Vs.
Mr. K. A. Jathin, .... For
Dy. Commissioner (AR) Respondents
CORAM:
Hon'ble MR. P. A. AUGUSTIAN, MEMBER (JUDICIAL) Hon'ble Mrs. R. BHAGYA DEVI, MEMBER (TECHNICAL) Date of Hearing: 06.07.2023 Date of Decision: 13.07.2023 FINAL ORDER No._20683_ of 2023 Per R. BHAGYA DEVI:
M/s. Carl Zeiss India Pvt Ltd, the appellant is a branch of Carl Zeiss India Pte Ltd, Singapore which is a 100% subsidiary of Page 1 of 7 C/23/2010 Carl Zeiss, AG. They import medical and other equipments manufactured by their principal for sale and after sales, demonstration, etc. Since the appellant is a related person, the Deputy Commissioner of Customs, Special Valuation Branch (SVB), Chennai vide Order-in-Original No.399/2003 dated 1.4.2003 had investigated the related party transaction and held that the appellant and the principal are related under Rule 2(2)(I) and (V) of the Customs Valuation Rules, 1988. The said Order-in-
Original which stated that the transaction value of goods imported by the appellant may be accepted subject to the addition under Rule 9(2) wherever necessary was reviewed and was upheld vide Review Order No.5588/2006 dated 15.11.2006. This order was accepted by the appellant. In 2009, the appellant filed 117 Bills of Entry for import of goods from their related principal through air cargo Bangalore. The Assistant Commissioner relying on the SVB Chennai enhanced the transaction value to the value indicated in the price list. Aggrieved by this order the appellant filed an appeal before the Commissioner of Customs (Appeals), Bangalore. The Commissioner (Appeals) in the impugned order held that the Circular No.11/2001-Cus. dated 23.02.2001 had stated as follows:
"The Special Valuation Branch (SVB, for short) as an (a) institution specialising in investigation of transactions involving special relationships and certain special features having bearing on value of import goods should be continued. SVBs would continue to be located only at four major Custom Houses, i.e., Chennai, Calcutta, Delhi and Mumbai and any decision taken in respect of a particular case is any of these major Customs Houses shall be followed by all other Custom Houses / formations."
2. The learned counsel on behalf of the appellant has not made any case on the merits of the assessment but only questioned the Page 2 of 7 C/23/2010 jurisdiction and submitted that Assistant Commissioner, Air Cargo, Bangalore who alone has the jurisdiction to pass an order on valuation and not Assistant Commissioner, SVB, Chennai. The order passed by Assistant Commissioner, SVB's order, ex-facie not sustainable as Chennai SVB had no jurisdiction to pass an order determining the value under Section 14 of the Customs Act, 1962. She further submitted that Notification No.15/2002-Cus. NT dated 7.3.2002 issued under Section 4 of the Customs Act while appointing various categories of officers of Customs of Chennai has specified the area in Col. No.2 of the said Notification covering in and around Chennai and the same does not extend to Bangalore. They have also relied on Tribunal's Order No.697/2010 dated 5.4.2010. The Tribunal held that:
"6.......... The Assistant Commissioner of Deputy Commissioner of Customs, Chennai is not competent to determine the value of the goods imported through ICD, Bangalore. As per subsection 1 of Section 5, an officer of Customs may exercise the powers and discharge the duties conferred or imposed on him under the act subject to conditions and limitations CBEC may impose. Therefore, the jurisdiction of officers working under the Commissioner of Customs, Customs House, Chennai is ruled out for the purpose of assessment of goods imported through ICD, Bangalore......."
Accordingly, the Tribunal had remanded the matter to the Original Authority for decision afresh. Hence, the appellant's claim that the impugned order is to be set aside. The appellant also relied on Notification No.15/2002 dated 7.3.2002 wherein at Sl. No.7 of the Notification, the SVB Chennai Review Order had no jurisdiction for the imports that were made through Air Cargo, Bangalore. Page 3 of 7
C/23/2010
3. Learned Authorised Representative for the Revenue has submitted that SVB was created as an institution specialising in investigation of transactions involving special relationships between buyer and supplier or those involving other special circumstances surrounding the sale of imported goods, both of which have a bearing on the assessable value. The learned AR referred to the Board Circular No.11/2001-Cus. dated 23.2.2001 which prevailed during the relevant period, wherein Board had issued clear instructions that SVBs would continue to be the SVB of that major custom houses which is located approximately to the head office of the importer would handle the investigations into valuation of such importer. Therefore, as per the Circular, the appellant's case was referred by the Deputy Commissioner of Customs, Bangalore for registration in SVB Chennai with the approval of the Commissioner of Customs, Bangalore. After investigation, it was found that the appellant and the supplier were related and accordingly, Order-in-Original No.399/2003 dated 1.4.2003 was issued to accept the transaction value of the goods imported subject to verification of pricelist and loading the values to the level of list price wherever the prices are found to be less than the list price and subject to addition under Rule 9(2) wherever necessary. This order was reviewed and confirmed vide Order-in-Original No.5588/2006 dated 15.11.2006. Both these orders were accepted by the appellant and hence, the impugned order passed by the Commissioner (A) is valid and sustainable. Page 4 of 7
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4. The fact that the appellant and supplier are related parties is not in dispute. Appellant had imported various medical equipments through Bangalore Air Cargo Complex and the Deputy Commissioner of Customs, Bangalore had referred to SVB Chennai for registration with the approval of Commissioner of Customs, Bangalore in terms of Circular No.11/2001 dated 23.2.2001. Accordingly, the order No.399/2003 dated 1.4.2003 was issued by the Deputy Commissioner of Customs, SVB stating that:
a) The importer M/s. Carl Zeiss (I) Pvt. Ltd., Bangalore and the supplier and the supplier M/s. Carl Zeiss Germany are related under Rule 2(2)(I) & (V) of CVR, 1988.
b) The transaction value of the goods and spares imported by third party may be accepted subject to addition under Rule 9(2) wherever necessary.
c) The transaction value of goods imported by M/s. Carl Zeiss may be accepted subject to verification of price list and loading the values to the level of list price wherever the prices are found to be less than the list price and subject to addition under Rule 9(2) wherever necessary.
d) The above decision has been taken on the basis of importer's various submissions, declarations and documents furnished. In case declaration, the same should immediately be brought to the notice of this office by the importer. The order will remain in force till the existing agreements and present methods of invoicing/pricing remain unchanged. Any change effecting the invoice value shall be informed to this office immediately.
Page 5 of 7
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e) This decision shall be reviewed as and when any additional information or contrary to whatever already furnished is available or a final review after a period of 3 years. The above order was taken up for review and vide Order-in- Original No.5588/2006 dated 15.11.2006 the same was confirmed by upholding the original Order No.399/2003 dated 1.4.2003. Both the above orders were accepted by the appellants. The impugned order following the above order cannot now be questioned on jurisdiction because the above two orders were rightly referred to SVB Chennai in terms of Board Circular No.11/2001 dated 23.2.2001. Since the SVB orders issued earlier were also imports made from Air Cargo Bangalore, whose orders based on SVB Chennai was accepted; the appellants cannot turn around and state that the SVB order of Chennai is not applicable to the present case.
5. The jurisdictional Notification No.15/2002 dated 7.3.2002 quoted by the appellant is only a Notification to define the areas of jurisdiction in the respective designated offices. This has no relevance as far as Special Valuation Branch is concerned, which is an institution specialised in investigation of transaction involving related parties.
6. For an earlier period of assessment of 21 Bills of Entry, the Final Order No.697/2010 dated 5.0.4.2010 passed by this Tribunal was appealed to the Hon'ble High court and the Hon'ble High court held as follows "in the circumstances we direct the original Page 6 of 7 C/23/2010 Authority to dispose of the matter as per order dated 05.04.2010 passed by the Tribunal in Appeal No. C/12/2006 on merits without being influenced by the observations made therein". In view of the above observations of the Hon'ble High Court, these 117 Bills of Entry are also remanded to the original authority for a fresh adjudication.
7. In view of the facts and circumstances of the present case, the appeal is remanded to the original authority.
(Order pronounced in open court on 13.07.2023.) (P. A. AUGUSTIAN) MEMBER (JUDICIAL) (R. BHAGYA DEVI MEMBER (TECHNICAL) Rv Page 7 of 7