BINU TAMTA:

1. M/s. Aglow Chemical Private Limited, Udaipur¹Appellant-Importer filed Bill of Entry²B/E No. 8367218 dated 21.04.2022 for clearance of goods declared as "Plant and Machinery with Technical Assistance Supply as per invoice and packing list" imported from M/s. Cimprogetti Srl, Italy under Bill of Lading No. MEDULV285464 dated 21.03.2022. The appellant declared the assessable value of the imported goods as EUR 1,26,000 (Rs.1,06,34,400/-) on the basis of Invoice No. 2022000067EQ dated 08.03.2022, classified the goods under CTH 84179000 and discharged the applicable customs duty.

2. During verification of documents, the Department noticed that the appellant had entered into a contract with the foreign supplier having a total contract value of EUR 4,20,000, comprising EUR 1,26,000 towards key equipment and EUR 2,94,000 towards licence, engineering package and technical assistance, as reflected in Invoice No.2022000067 dated 08.03.2022. The B/E was thereafter sent for re-appraisal and a Pre-Notice Consultation letter dated 11.05.2022 was issued to the appellant. In reply, the appellant contended that only part machinery had been imported and that licence fee and technical assistance charges were not a condition of sale of the imported goods. Not being satisfied with the explanation, the Department seized the goods on 23.05.2022 under Section 110(1) of the Customs Act, 1962 alleging mis-declaration of value and proposing inclusion of licence and technical assistance charges in the assessable value.

3. Show Cause Notice dated 30.06.2022 was issued to the Appellant proposing re-determination of assessable value at EUR 4,20,000, confiscation of the goods under Section 111(m) of the Customs Act, 1962³The Act and imposition of penalty under Section 112(a) of the Act. The Adjudicating Authority vide Order-in-Original dated 06.10.2022 held that licence fee, engineering and technical assistance charges were includible in the assessable value of the imported goods. The appeal filed by the appellant has been dismissed by the impugned order⁴Order-in-Appeal No.44(RLM)CUS/JPR/2023 dated 24.11.2023. Hence the present appeal has been filed.

4. Heard Shri Ajay K. Mishra, Advocate for the appellant and Shri Girijesh Kumar, Authorised Representative for the Department and perused the records of the case.

5. The first and foremost submission of the learned counsel for the appellant is that the authorities below have erred in treating separate invoices for equipment, supply and engineering or technical services as a single composite transaction. He submitted that the engineering package, technical assistance and license fee are independent of the imported equipment and are not related to sale, and therefore, the declared value of imported equipment satisfies all conditions of Section 14 of the Act and should be accepted as the transaction value. Once transaction value is acceptable under Section 14, resort to Customs Valuation Rules ⁵CVR is unwarranted. In support of his submission, the learned counsel has placed reliance on the following decisions:-

(1) Tata Iron and Steel Co. Ltd. Vs. Commissioner⁶2000 (116) ELT 422 (SC)

(2) Commissioner of Customs (Port), Kolkata Vs. M/s. J.K. Corporation Ltd.⁷2007 (2) TMI 629 -SC

(3) Commissioner of Customs Vs. M/s. Essar Steel Ltd. ⁸2015(4) TMI 486 -SC

(4) CC Vs. Hindalco Industries⁹2015(5) TMI 696-SC

(5) CC, Kolkata Vs. SAIL¹⁰2020 (372) ELT 478 (SC)

(6) Erbatech Machinery Pvt. Ltd. Vs. CC, Chennai-II¹¹2025(5) TMI 586-CESTAT-Chennai

(7) Indorama Industries Ltd. Vs. CC, Kandla¹²2024 (7) TMI 1045-CESTAT-Ahmedabad

The learned counsel has also challenged the issue of confiscation on account of mis-declaration of value and levy of penalty.

6. Per contra, the learned authorised representative for the Revenue reiterated the findings of the Authorities below. He submitted that the importer entered into a single composite contract with the foreign supplier for supply of plant and machinery along with license, e