APOLLO TYRES LIMITED Vs. COLLECTOR OF CUSTOMS

JUDGEMENT

(1.) Under appeal is the judgment and order of the Customs, Excise and Gold (Control) Appellate Tribunal, New Delhi. The Tribunal allowed the appeal of the Revenue setting aside the order of Central Board of Excise and Customs and restoring the order of the Collector of Customs, subject to the modification of reducing the quantum of penalty.

(2.) The appellants were setting up a plant for the manufacture of tyres. They entered into an agreement for the supply of technical know-how, documentation and the like. On the same day they entered into a second agreement which noted that the second party to the agreement, General Tyre International Company, had for many years been engaged and had acquired vast experience in the manufacture of tyres as well as the design, engineering and equipment of plants for the same. The agreement in Article 5 stated, so far as is relevant: OPTIONAL PROCUREMENT SER-VICES:

(3.) The appellants procured through the instrumentality of General ten items of equipment. The same were cleared on the basis of their invoice value. Thereafter a notice was served upon the appellants asking them to show cause why the assessable value of these items of equipment should not be recomputed and enhanced so as to add to the invoice values thereof the procurement charges thereof, that is to say, to add 3% of the FOB value of each item of equipment. The show cause notice was confirmed. The appellants appeal to the Central Board succeeded, and therefrom the Revenue went in appeal to the Tribunal.