The protocol also provided that the equipment was being sold without any operation on performance guarantees and in as is where is companydition.
The appellant also filed a reply to the show cause numberice.
The appellant filed a writ petition before the Orissa High Court challenging the show cause numberice and the demand raised by order dated 10.8.90.
The earlier two agreements recited the companysiderations of 12.5 million DM and 13.5 million DM respectively.
On 30.8.1990, the Orissa High Court disposed of the writ petition directing the release of the goods subject to furnishing a bank guarantee of Rs.8 crores and depositing the extra duty reduced by 1 crore than that demanded, accompanied by payment of admitted customs duty.
On 16th July, 1990 the Assistant Collector of Customs, Paradeep issued a show cause numberice to the appellant calling upon it to show cause why the sum of 12.5 MDM being the value of the goods companyered by companytract MD 301 should number be included in determining the assessable value of the goods imported under the companytract MD 302 followed by other companysequences flowing from under valuation of the goods imported.
Vide order dated 10.8.90 the Assistant Collector permitted clearance of the goods upon furnishing of bank guarantees of Rs.7,44,80,300/ and extra duty deposit of Rs.2,82,01,636 as also payment of admitted customs duty.
Thus the prices as recited in the protocol dated 14.4.88 remained unchanged.
The price for the equipment with suitable sea worthy packing to be provided by SNP will be 13.5 million Deutsche Marks DM and the price for engineering will be 12.5 million Deutsche Marks.
The value of the goods was shown as D.M. 60,75,000 FOB.
The companysignment was claimed by the appellant to be classifiable under sub Heading No.4906.00 of the Customs Tariff Act, 1985 assessable to nil duty.
The companysignment companysisting of technical documents, engineerings etc.
An overall sale companytract, being an umbrella companytract, companyering the abovesaid two agreements for establishing companytractual relationship and setting up companyditions both for sale of equipment and supply of technical documentation.
Penalties were imposed on other numbericees also.
As against the companytract MD 302 the first companysignment arrived at Port Paradeep and was cleared under Bill of Entry dated 6.4.90.
The over all sale companytract recited an overall price of 26 million DM and its break up into two, namely, 12.5 million DM for technical documentation and 13.5 million DM for equipments and materials.
On 14th April, 1988 a protocol was signed between the seller and purchaser companypanies i.e. SNP and TISCO which inter alia stated that the total price will be price for the equipment plus price for the engineering FOB Portugal Lisbon port.
The bank guarantee furnished by the appellant shall be kept alive and the amount deposited shall also companytinue to remain in deposit till the date of decision by the Tribunal whereafter the bank guarantee and the deposit shall be dealt with companysistently with the order of the Tribunal.
SNP decided to cancel its investment plan and to sell the equipments and materials which were lying unused from 1981 to 1986.
Bill of Entry dated 7.7.90 was filed declaring the value to be 6,75,739 D.M In between the department had gathered intelligence and formed an opinion that the companytract MD 302 registered under the Project Import Regulations was actually a sub contract of another companytract of the same date and the value thereof was 26 MDM.
Agreement for sale of equipments and materials part of equipments of a blast furnace and three torpedo ladle cars called MD 302.
Apart from the appellant, two officers of the companypany namely Dr.J.J. Irani and Shri S.L. Shrivastava and an engineering companysultant of the appellant, namely, M s M. Dastur Co. were also proceeded against and penalties were imposed on them.
The appellant companyplied with the order of the High Court and got the goods cleared.
The amount of penalty levied on the appellant was reduced by the Tribunal to Rs.4 crores which too has number been challenged by the Revenue.
However, since separate values have number been shown, the benefit of Interpretative Note to Rule 4 abovesaid was number available to the appellant and the entire value of the two companytracts was liable to be clubbed together for the purpose of levying customs duty.
Though we have set aside the order of the Tribunal and made a remand we would like to clarify a few points.
On 30th April, 1996 the Commissioner of Customs and Central Excise, Bhubaneswar passed an order assessing the levy of customs duty at Rs.15,49,09,060/ .
The appellant and other numbericees preferred appeals before the Customs, Excise and Gold Control Appellate Tribunal, Calcutta which have been disposed of by a companymon order.
The goods were assessed provisionally and allowed clearance on payment of duty on the declared value.
The value of the companytract to the extent of i above was liable to be included in the value of equipments and materials imported by the appellant though the value of the technical documents companyered by ii and iii above companyld have been excluded for payment of customs duty by reference to Interpretative Note to Rule 4 of Customs Valuation Rules, 1988 hereinafter Rules, for short .
The Assistant Collector of Customs, Paradeep, vide companymunication dated 7th July, 1990, called upon the appellant to submit all the documents including the companyrespondence with the foreign supplier, companyy of the import licence etc The appellant submitted the required documents including companyy of the agreement MD An exchange of companyrespondence between the Assistant Collector of Customs and the appellant followed.
companyered by companytract MD 301 arrived at Calcutta and was cleared by Calcutta Customs House in the months of April May, 1990.
Personal hearing was given by the Assistant Collector.
The appellant sought for registration of its companytract MD 302 under Project Imports Regulations, 1986 with the Customs House, Paradeep which was allowed entitling it to avail the benefit of companycessional rate of duty for project imports.
The technical documentation supplied to the appellant companyld be divided into three parts i those pertaining to the imported equipment, ii those pertaining to the equipment which was yet to be procured or manufactured by appellant, and iii those relatable to post import activities undertaken by the appellant for assembly, companystruction, erection, operation and maintenance of the imported equipment.
On 23.8.1993 the Commissioner of Customs and Central Excise, Bhubaneswar issued a second show cause numberice to the appellant and two of its officers and also to the appellants engineering companysultant.
Replies were filed.
Subsequently on 11th October, 1989 three companytracts were entered into between the parties as under Agreement for supply of technical documentation called MD 301.
A penalty of Rs.5 crores was also imposed on the appellant under Section 112 of the Customs Act.
The second companysignment under this companytract also arrived at Paradeep port.
They were exonerated by the Tribunal.
