Content Provider | Supreme Court of India |
---|---|
e-ISSN | 30484839 |
Language | English |
Access Restriction | NDLI |
Subject Keyword | Customs Act 1962/Customs Valuation Rules: S.14(1)(b)/Rule 8- |
Content Type | Text |
Resource Type | Law Judgement |
Jurisdiction | India |
Case Type | Appeal |
Court | Supreme Court of India |
Disposal Nature | Appeal Dismissed |
Headnote | Customs Act, 1962/Customs Valuation Rules:S.14(1)(b)/Rule 8--Foreign Collaboration agreement-Value of imported packs-Price shown in the invoices-Whether reflects the true sale price-Taking into consideration the lumpsum payment made under the collaboration agreement, the value of imported packs raised by applying provisions of s.14(1)(b)-Held: Invalid and unjustified.The Respondent, a Public Limited Company, has been carrying on business in the manufacture of different types of automobile vehicles. It entered into a technical know-how agreement for ten years with a French Company in respect of a diesel engine manufactured by it. As per the agreement, respondent remitted the amount in three instalments. Respondent imported CKD packs and service components from 1982 onwards from the said French Company. The Assistant Collector, Central Excise took the view that the lump sum paid under the agreement included on element of price to be settled in regard to the supply of CKD components, and would have included an element of royalty also for the products. He held that the invoice value of CKD parts set out in the Invoices is not the sole consideration for the sale of the goods. Invoking the provisions under s.14(1)(b) r/w Rule 8 of the Customs Valuation Rules, he held that the value of the imported packs should be raised by 1.5%. This was affirmed by the Collector of Customs (Appeals).Respondent filed a Writ petition before the High Court. The Single Judge before whom it was listed, quashed the impugned orders and ordered refund of excise duty recovered from the respondent. On appeal a Division Bench confirmed the order.In appeal to this Court, Union of India contended that the price mentioned in the invoices was not the sole consideration; and that the price should have been determined by taking into consideration the lump sum of 15 million French Francs paid by the respondent to the foreign Collaborator under the agreement and on that basis Section 14(1) (a) was excluded and section 14(1)(b) was resorted to.Respondent contended that there was no material to indicate any nexus or connection between the lump sum payment of 15 million French Francs and the supply of CKD packs to the Respondent; that it cannot be said that the price fixed in the invoices is not the price of the goods obtained later and was reckoned or reflected in the lumpsum payments made, long before; and that the parties never had in mind the nature and extent of the spare parts that might be required later, when the Collaboration agreement was entered into. |
Judge | Hon'ble Mr. Justice K.S. Paripoornan |
Neutral Citation | 1995 INSC 174 |
Petitioner | Union Of India And Ors. |
Respondent | Mahindra And Mahindra Ltd., Bombay |
SCR | [1995] 2 S.C.R. 595 |
Judgement Date | 1995-03-08 |
Case Number | 1886 |
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