WELSPUN MAXSTEEL LTD. Vs. COMMISSIONER OF CUSTOMS (IMPORT)

JUDGEMENT

(1.) THE appeal arises from Order -in -Appeal No. 699 -700/MCH/DC/Contract Cell/NCH/2012 dated 07/08/2012 passed by the Commissioner of Customs (Appeals), New Custom House, Mumbai. Vide the impugned order, the ld. Lower appellate authority upheld the Order -in -Original No. 1345/DC/Contract Cell/AKS/10 -11 dated 10/11/2010 passed by the Dy. Commissioner of Customs (Import), Contract Cell of New Custom House, Mumbai, wherein it was held that the amounts of - (i) US $ 2,250,000/ - payable under the Process Licence Agreement; (ii) US $ 16,231,000/ - payable as Basic Engineering Services; and (iii) US $ 3,769,000/ - towards supervisory services - are includible in the assessable value of the capital goods imported by the appellant M/s. Welspun Maxsteel Ltd., Indore under the provisions of Rule 9(1) (c) and 9(1)(e) of the Customs Valuation Rules, 1988 (CVR in short) read with Section 14 of the Customs Act, 1962 and differential customs duty on account of the above inclusions along with interest thereon are liable to recovered from the appellant accordingly while finalising the assessment of the capital goods. Aggrieved of the same, the appellant is before us.

(2.) BRIEF facts relating to the case are as follows. The appellant M/s Welspun Maxsteel Ltd., Indore, imported capital goods, equipment, components, etc. for the initial setting up of a plant to manufacture 'hot briquette sponge iron' in Raigad District of Maharashtra State under the Project Import Regulations, 1986. For this purpose they entered into four agreements, all dated 22/10/1989 with two foreign suppliers/collaborators, namely, M/s. Davy Dravo, Pennsylvania, USA (Davy in short) and M/s. HYLSA, S.A. de CV, Mexico (HYL in short). The agreements pertained to (a) Supply of Equipment Agreement; (b) Basic Engineering Services Agreement; (c) Process Licence Agreement and (d) Supervisory Services Agreement. The suppliers and the appellant are not related. The scope of the agreement are briefly as follows: -

(3.) THE ld. Additional Commissioner (AR) appearing for the Revenue made the following submissions, while re -iterating the findings of the lower authorities.