M/S ASSOCIATED CEMENT COMPANIES LTD. versus COMMISSIONER OF CUSTOMS

Citation: [2001] 1 S.C.R. 608 · Decided: 25-01-2001 · Supreme Court of India · Bench: B.N. KIRPAL · Disposal: Disposed off

Cited by 5 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

A 
B 
MIS ASSOCIATED CEMENT COMPANIES LTD. 
v. 
COMMISSIONER OF CUSTOMS 
JANUARY 25, 2001 
[B.N. KIRPAL, DORAISWAMY RAJU AND 
K.G. BALAKRISHNAN, JJ.] 
Customs Act, 1962--Section 2(22) (c) and (e) 12, 24 & 28(1)--Customs 
mluation (Determination of Price of Imported Goods) Rules, 1988-Rules 
C 3&4-Customs duty-Levy of-On import of drall'ings, designs etc.-ln the 
course of transfer of technology ll'ith foreign collaborators-Held, customs 
duty can be levied, since they are goods-Customs Tariff Act, 1995-Chapler 
49. 
Sections 12 & 14-Rules 3, 4, & 9-Customs duty--On the imported 
D drawings and designs, etc.-Valuation of-Plea that duty can be levied only 
on the media-Held, intellectual property when put an a media would be 
regarded as an article and hence duty is payable on its total value. 
Section 28(!) proviso-Rule 10-Customs duty-Non-payment of-
E Issuance of notice-After limitation period-Plea that notice barred by 
limitation, in the absence of intention to evade duty-Willfiil suppression or 
miss-statement of value of the imported goods, proved-Held, notice not 
barred hy limitation. 
--"(. -
Sections 2 {14) , 2(22) & 12-Customs d1:ty-levy of-Import of 
_. 
F drawings and designs etc.-Without payment of duty--Duty levied on entire 
contract value-Tariff provided that import on the goods was free of duty-
Held, drawings and designs were not dutiable articles-Central Excise Act, 
1944-Section 2(d)--Customs Tariff Act, 1995-Heading No. 49.06 
Section 28( !)-Customs duty-levy of-On the import of drawings and 
G designs etc.--Drawings originally sent ji-om India, later imported after 
approval of the same from the foreign collaborator-Held, duty not /eviable. 
Customs Tariff Act, 1995--Heading No. 9R.03--Customs duty-levy 
of-Import of technical material hy courier--Clearance of-A part of 
passenger haggage-Held, duty has to be paid on such goods by virtue of 
H 
608 
.,,...___ 
ASSO CEMENT CO. LTD v. COM MR. OF CUSTOMS 
609 
the Heading 
Appellants, public corporations engaged in the manufacture of excisable 
goods, entered into technical collaboration with foreign companies. As part 
A 
of the fulfilment of the contract, the contracting parties abroad, sent drawings 
designs etc. to India through professional couriers or by post parcels. In 
Civil Appeal No. 3632 of 2000 these were imported by hand through a B 
passenger. In Civil Appeal No. 1493 of 2000, the drawings sent from India 
were approved by the foreign com pally and then sent to India. At the time of 
importation only the nominal value of the drawings etc., were declared. It 
came to the notice of the respondent that the appellants had imported drawings, 
designs, etc., on remitting the consideration for the same, and they had been C 
cleared without proper declaration and without payment of correct amount of 
duty 
The respondents issued show cause notices under Section 28(1) r/w 
Section 24 of the Customs Act, 1962, for levying customs duty on the drawings, 
designs, etc. Appellants replied that since the imported materials were not D 
'goods', there could not be any excise duty on service since the remittance 
were in form A-2 and tax at source under the Income Tax Act was paid in 
respect of the contracts; and that the demand was barred by limitation. The 
Commissioner demanded duty and imposed penalty on the appellants. Appeal 
of the appellants before the Tribunal was dismissed. 
In appeal to this Court it was contended that the transaction between 
the appellants and their respective foreign collaborators was one of transfer 
of technology and hence excise duty cannot be levied on the value of ideas 
which are not goods; and that the contracts in these cases were for services 
E 
F 
on the basis of which permission for release of foreign exchange was obtained 
from Reserve Bank of India; and that even if what was imported were goods, 
valuation of the same had to be nominal only on the media; and that the show 
cause notices which were issued were barred by time inasmuch as the 
extended period of limitation could not be availed as the appellants had never 
intended to evade duty; and that the imports through the courier could not be 
governed by heading No. 98.03 of the Customs Tariff Act. In Civil Appeal No. G 
3632 of2000 appellant contended that at the time when the drawings were 
imported, the import of the same was free of duty and duty could not be levied 
even as part of the passenger baggage. 
Allowing Civil Appeal Nos. 3632 of 2000 an

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