Commissioner of Customs Vs Kerala State Electricity Board Ltd (CESTAT Bangalore)
In the case of Commissioner of Customs Vs Kerala State Electricity Board Ltd. (CESTAT Bangalore), the tribunal addressed whether charges for supervision of installation and field efficiency tests paid to overseas suppliers should be included in the assessable value for customs duty. The Revenue challenged the Commissioner’s ruling, arguing that these charges should be added to the import value under Rule 9(1)(e) of the Customs Valuation Rules, 1988. However, the respondent contended that these charges were related to post-importation activities and thus should not be included in the customs duty calculation. The CESTAT upheld the respondent’s position, ruling that such charges are not part of the assessable value for customs duty. The tribunal emphasized that these expenses are not considered a condition of sale but rather post-importation costs, as confirmed by relevant Supreme Court judgments. Consequently, the Revenue’s appeal was dismissed, and the original decision to exclude these charges from the assessable value was affirmed.
FULL TEXT OF THE CESTAT BANGALORE ORDER
This appeal is filed by the Revenue against Order-in-Appeal No. COC-CUSTM-000-APP-511-2015-16 dated 08.06.2015 passed by the Commissioner of Customs (Appeals), Cochin.
2. The facts of the case in brief are that the respondents are registered under the Project Contract with Commissioner of Customs for availing project benefits under Project Import Regulations, 1986 i.e., concessional rate of duty for import of goods for setting up of a Hydro Electric Power Project at Kuttiyadi. On completion of the project, the respondent was directed for reconciliation and on the basis of scrutiny of records, it was alleged that the respondent had inter alia not paid duty of Rs.96,23,121.50 on the charges of Supervision of Installation and Field Efficiency Test, which was not included in the total value of project cost. On adjudication, the said demand was confirmed by the adjudicating authority. Aggrieved by the said order, the respondent filed an appeal before the learned Commissioner (Appeals), who allowed the appeal of respondent by setting aside the order of the adjudicating authority. Hence, Revenue is in appeal.
