Customs, Excise and Gold Tribunal - Tamil Nadu
Nagarjuna Fertilizers And Chemicals vs Commissioner Of Customs on 15 November, 2000
Equivalent citations: 2001(75)ECC62, 2001(136)ELT343(TRI-CHENNAI)
ORDER S.S. Sekhon, Member (T)
1. These two appeals are taken up together since the issues are inter linked and related.
2. The appellants are importers of certain equipment under Project import for the erection and commissioning of Ammonia and Urea Plant in Andhra Pradesh. The goods were imported and assessed provisionally to duty and thereafter assessments were finalised for the purpose of import under Project Import regulations under Customs tariff heading 9801 and also for the value to be determined under Section 14 of the Customs Act, 1962 read with the relevant Customs valuation (Determination of Price of Imported Goods) Rules, 1988. The Collector (Appeals) in Appeal No. C/302/95-A against which the appellants has come in appeal, has held as under:
The order of the Assistant Collector is modified. He may ascertain the details of the charges paid or payable to SNAM Progetti for the service enumerated under Article 5(2) of the Agreement. The portion of payments which reflected the cost of services other than detailed Engineering is not includible in the assessable value of the goods as per Rule 9(4) of the Customs Valuation Rules. If for any reason the documents/invoices do not reflect the payments or individual services then the entire amount (DM 1,38,06,000) as stated in the Article 5(2) of the Agreement is addable to the assessable value. The appellants should produce all documentary proof in support of their case.
Catalyst imported under Purchase order Nos. 920130 and 920143 are eligible for Project Import Regulations and therefore, are assessable at concessional rate of duty.
Subject to this modification the appeal is rejected.
3. Consequent to this order of remand, the Assistant Collector took out fresh show cause notice and confirmed the valuation against which the appellants went to Collector (Appeals) who vide Order No. 1/98 (V) Cus dated 16.1.98 held as follows:
6. The issue of inclusion of process know how has already been dealt with very exhaustively and in detail in the order in original No. 73/94 Section 13(A) 90/AP Vol. II dated 30.5.94 passed by the Assistant Collector and also by Collector (Appeals) in his order in appeal dated 30.1.95. It is the settled issue now. It is neither proper nor justified on the part of the Appellants to reopen the issue at this stage. Moreover, the Hon'ble Supreme Court in the case of Collector of Customs (Preventive), Ahmedabad v. Essar Gujarat Ltd. Surat in Civil Appeal No. 3152-53 of 1991 dated 19.11.96 have ordered that cost of technical services provided by the supper (sic) should be added to the value of the imported plant.
7. There is no controversy over the fact that the catalysts have to be assessed at the concessional rate applicable to project imports. The appellants have to pay Rs. 22,25,536 on this account. The appellants have to pay Rs. 4,24,43,215 on the ground that DM 2,29,73,798 is to be included in the assessable value. Thus, the total amount payable by the appellants is Rs. 4,46,59,751.
ORDER In view of the above, the order in original dated 25.3.96 passed by the Assistant Commissioner is correct both on facts and in law. The same is upheld and the appeal is rejected.
4. Appeal No. C/156/98 is before us against this order and findings of the Collector (Appeals). We observe that the Revenue has not filed any appeal against the first order of the Collector (Appeals) determining the value and the scope of imports under Project Import Regulations or appealed against the subsequent order of the Collector (Appeals), that is to say in both these appeals the Revenue is not aggrieved in appeal before us. However, we find that the Revenue has filed cross-objection against the order in appeal, i.e. in Appeal No. C/156/98.
5. We have heard Shri C. Saranavanan, learned Counsel for the appellants and Shri S. Kannan, learned DR for the Revenue.
6. The learned Counsel submits that:
(a) In the present case the charges which have been added vide order in appeal impugned in Appeal No. C/302/95-A is not permissible under the Customs law.
(b) In Appeal No. C/156/98, he submits that the order of the Collector (Appeals) impugned, suffers serious irregularities of violation of their rights of natural justice, inasmuch as the matter was heard by one Collector (Appeals) and decided by another person without affording any fresh hearing to the appellants.
(c) In Appeal No. C/156/98, fresh show cause notice was issued by the Assistant Collector which travels beyond the remand mentioned by the impugned order in appeal in Appeal No. C/302/95-A.
7. The learned DR Shri S. Kannan submits that:
(a) The matter regarding valuation of the charges incurred outside the country of export to India and the engineering and drawing charges and other charges incurred is well settled by the Hon'ble Supreme Court and he relied upon the decision of the Supreme Court in the case of Andhra Petro Chemical and in the case of Bombay Dyeing and Manufacturing Co. . He also relied upon the decision of the Supreme Court in the case of CCE v. Essar Gujarat Ltd. reported in 1998 (88) ELT 609 (SC).
(b) He submits that there is clear cut findings by the Collector (Appeals) in the order impugned in appeal No. C/302/95-A regarding inability of the appellants to have given break-up of the cost and he supports the order of the Collector (Appeals) in that case and as regards the submission that the findings travels beyond the show cause notice and the remand order of the Collector (Appeals), as made out by the learned Counsel, he submits that the appellants have failed to produce necessary documents before the authorities and the order does not suffer from any violation of natural justice as mere production of a certificate from M/s. SNAM Progetti will not be sufficient material for granting the benefit of the remand order of the Collector (Appeals).
8. The learned Counsel in the rejoinder draws out attention to page 249 of the paper book regarding purchase order which gives the split in the break up of the various costs and these documents before the lower authorities were disregarded along with other documents and the material submission made by them.
9. We have considered the submissions made and the material on record and after considering the same, we find that:
(a) The Hon'ble Supreme Court decision cited at Bar by the learned DR squarely covers the issue of inclusion of portion of the detailed engineering costs and we have therefore no hesitation to uphold the order in Appeal No. 2/95 (V) Cus dated 30.1.95 impugned in appeal No. C/302/95A. We find no infirmity in the order and we find the same to be as per law laid down by the Hon'ble Supreme Court. We find that there is no appeal against this order by the Revenue. We would confirm this order of the Collector (Appeals) as arrived at.
(b) As regards the impugned order in appeal No. C/156/98, the submission of the learned Counsel that the matter was heard by the then Collector (Appeals) Shri MVS Prasad and thereafter the order was passed by Shri A.K. Srivastava, Collector, Hyderabad who succeeded him as Collector (Appeals), Hyderabad and no fresh hearings were granted by Shri A.K. Srivastava to them. The rights of natural justice of the appellants have been therefore, violated by the denial of this opportunity of fresh hearing by the successor in office. Therefore, we cannot find any reason to uphold the order, especially when the appellants are submitting and bringing to our attention various documents and particulars regarding break-up of costs available, which should be considered by the lower appellate authority and dealt with in the order after following the principles of natural justice. In this view we would come to a finding that the order of the lower authority & the appellate authority in appeal No. C/156/98 is required to be set aside with a direction that the matter should be examined afresh in terms of the remand order of the Collector (Appeals) in Appeal No. C/302/95A.
10. In view of our findings we reject the appeal No. 302/95A, and allow the appeal No. C/156/98C for de novo adjudication after setting aside the order and direct the same to be re-determined in the light of the remand order in appeal No. 2/95 (V) dated 30.1.95.