Per Shri K.S. Venkataramani:

The appellants as contractors of Steel Authority of India Ltd. Rourkela Steel Plant in Orissa, have been entrusted with the setting up of gas cleaning plant as part of Basic Oxygen Furnace shop. For this purpose the appellants entered into an agreement and signed a contract on 27.2.93 with M/s Davy Mckee (Stockton) Ltd. by which M/s Davy were to provide basic design and drawing and also supervise the detailed engineering erection and commissioning of the gas cleaning plant in India and were also to undertake training of personal abroad. They were also to render technical services and undertake guarantee test for the efficient functioning of the gas cleaning plant. The fabrication, manufacture etc. are to be done in India with indigenous goods based on the designs supplied by M/s Davy.

2. In pursuance of the agreement a consignment of Design and Engineering Drawings were imported at Mumbai Customs, Air Cargo Complex for which Bill of Entry was filed on 20.8.96. The Asstt. Commissioner of Customs found that as per para 2.3 of the annexure I of the contract besides the amount of £ 20,00,000/- for design and engineering, the supervision charges in India