ASSOCIATED CEMENT COMPANY LTD.

Customs Secretary
2001 (128) ELT 21 (S.C)
Facts
Leela Ventures establishes, operates and maintains hotels and resorts. Foreign
company M / s was hired to design hotels and resorts. Wimberly Allison Tong
& Goo, USA ("WAT") provided building services including development
drawings. In connection with the above agreement with
WAT, the petitioner received the drawings and diskettes by courier. The
drawings thus obtained formed part of the technical cooperation and / or
technical know-how, accompanied by an air waybill and an invoice issued by
the shipper. In each case, the courier declared a drawing containing various
descriptions such as "drawings", "architectural design". The value of these
drawings and designs was declared at a par value of $ 1. According to Leela
Ventures, $ 1 was the correct value because the drawing itself can be replaced
as if the drawing was lost, and the loss is worthless as if it were only the cost of
paper. The value declared by the courier was in good faith and was based on the
invoice he had. According to the petitioner, the courier statement was in line
with current practice at the time. At the time of import, these designs and discs
were declared at the declared par value. Other of these complaints are also
public corporations engaged in the manufacture of excise taxes. Similar to Leela
Ventures, other petitioners have provided technical cooperation with leading
manufacturers in their respective fields abroad. The contract provided
technology exchanges in the form of staff providing know-how, drawings, and
designs for media training and similar other activities.
Drawings, drafts, etc. were occasionally sent by overseas contracting parties as
part of the fulfillment of the contract. In the case of
,
these drawings etc. were imported manually. Otherwise, drawings etc. were
imported by professional courier or postal parcel. Only one face value is
declared at the time of import. According to Revenue Intelligence collected by
the Revenue Intelligence Bureau and Special Assessment Branch
, the petitioner revealed that he had imported drawings, blueprints, and plans
through the courier after remittance of consideration, but the appropriate
explanation. Released them without payment, without payment Correct
obligation amount.
The claimant did not declare the correct transaction amount, so a
evidence order was issued asking the claimant why. During the investigation,
the amount sent or declared in exchange for the drawings, designs, and plans
provided by the staff will serve as the basis for clearing the goods through
Customs, along with Customs Law No. 14 of 1988. It is used as the transaction
amount based on the article.
The appellant filed a response, claiming that the imported goods were not
commodities. The receipt was dissatisfied with the reply, insisted on paying the
membership fee, and was paid in protest of the petitioner. On the other hand,
the petitioner went before the SC. In their
appeal, the
applicant filed the following
allegations.
(i) Excise is not levied on the value of an idea because the idea is not a
commodity.
(ii) (ii) Even if the imported goods are goods, their evaluation must be nominal.
(iv) Imports by courier could not be regulated by position number 98
of the Customs and Customs Act.
output for inspection. (I) Whether the imported drawings, floppies, manuals,
etc. are goods for which excise tax can be levied.
Opposition by the appellant.
(a) The transaction between the petitioner and each foreign employee was for
technology transfer. This knowledge and know-how was valuable, but not
concrete. Technology is not converted from intangible to tangible or immovable
when transmitted to India via several media. The
media is send-only and is fully attached to the main transaction. By analogy, it
has been argued that a legal opinion or court decision, when sent as a brief or a
certified copy, does not constitute an assignment of goods by a lawyer to a
client or by a court to a party to a proceeding. ..
Reasoning of the Court.
Section 2(22) of the Customs Act
defines
“goods”
as follows :
“Goods” includes
(a) vessels, aircrafts and vehicles;
(b) stores;
(c) baggage;
(d) currency and negotiable instruments; and
(e) any other kind of movable property
The Central Govt. has framed Customs Valuation (Determination of Price of
Imported Goods) Rules, 1988.Under these rules the valuation of imported goods
is done.
Rule 3. Determination of the method of valuation. –
(i) For the purpose of these rules,the value of imported goods shall be the
transaction value;
Rule 4. Transaction value. (1) The transaction value of imported goods shall be
the price actually paid or payable for the goods when sold for export to India,
adjusted in accordance with the provisions of
these Rules.
Customs Tariff Act provides for the rates at which the customs duty is levied
under the Customs Act, 1962.
Chapter 98 of Customs Tariff Act
, inter alia, applies to passengers` baggage which
states that on “all dutiable articles, imported by a passenger or a member of a
crew in his baggage”, customs duty will be paid at the standard rate of duty.
According to Section 12 of the Customs Act, duty is payable on goods imported
into India. The word “goods” has been defined in Section 2(22) of the Customs
Act and it includes in subclause (c) “baggage” and subclause (e) “any other kind
of