Page 127 - DRI ANNUAL REPORT EBOOK

vide Instructions dated 27.04.2020 was issued and later on mandatory Instruction dated 21-08-2020 was issued by CBIC (guidelines to be followed for conduct of personal hearing in virtual mode under Customs Act, 1962, Central Excise Act, 1944, CGST Act, 2017, IGST Act, 2017 and Chapter V of Finance Act, 1994 (available at https://www. cbic.gov.in/resources//htdocs-cbec/ legalaffairs/Instruction_bkp_210820. pdf ].
2.4 The advocates, lawyers, Authorised Representatives, Noticees, Appellants have found the new system comfortable as they can attend multiple hearings with multiple authorities (CESTAT, Commissioner (Appeals, Adjudicating Authorities etc.) located at various cities, by sitting in their home. It has significantly improved the efficiency of entire process while also ensuring that all health related guidelines are observed.
3. Valuation: interpretation of word “condition” under Rule 9 (1)(e) of Valuation Rules:
3.1 Another landmark judgement by Hon’ble Supreme Court in the field of valuation is Judgement dated 27 April 2020 in Civil Appeal No.6398 of 2009 in the case of Commissioner of Customs (Port) Kolkata Vs M/S Steel Authority of India Ltd
3.2 Dispute in this appeal related to valuation (basic design & engineering fee, supervision charges during manufacture of Indian equipments’
and for erection, commissioning and performance guarantee tests) under the Customs Act, 1962 of import of certain items made by the respondent M/s SAIL under two contracts.
3.3 SAIL paid import duty on the value of plant and equipments alone, whereas Customs authorities were of the view that such charges are to be added to the invoice value. There were two different contracts. One for supply of plant and equipments and the second for charges relating to aforesaid design and engineering fee etc.
3.4 Customs viewpoint was that the contractor was entrusted with the work on a turnkey basis, where the entire supplies and services were dependent on each other hence import of designs and drawings etc. even for post-importation activities should be treated as condition of import of the equipments –
Hon’ble Supreme Court relied upon Honble Apex Court earlier judgment in the case of Ferodo India Pvt. Ltd., reported as 2008 (224) E.L.T. 23 (S.C.) and held that even if main equipment and “services relating to post importation work” have been sourced from the same supplier, unless there is “condition by supplier that post importation activities are to be sourced necessarily from him”, addition of charges relating to “services relating to post importation work”, is not justifiable as “condition” cannot be implied”. It needs to be proved.
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